How is income inequality measured? Is this effective? Is there a better way?

Income inequality is measured usually using a gini-coefficient. This is represented by the area between a Lorenz curve and the line of equality. A Lorenz curve is a graph that is formed by "illustrating the percentage of total income earned by a given proportion of the population. The Gini ratio, the area between the diagonal line and the Lorenz curve divided by the whole area below the diagonal, is a numerical measure of the degree of income inequality" (Glencoe). This means that you could find out something such as: the bottom 30% of households bring in 15% of the nations income.  According to worldbank.org the gini-coefficient can vary between 0-1. If the coefficient is 0 it means that there is complete equality in the degree of income. If the coefficient is 1, it means that one person has all the income and everyone else has nothing.
I think this is an effective way of measuring income inequality. It fully exemplifies the difference between incomes of rich and poor. However, other methods exist such as the Atkinson index, coefficient of variation, and decile ratios. Most of these aren't used because they don't use the entire population of incomes. I think that the only better thing about the Atkinson index is that it gives a "varying sensitivity to inequalities in different parts of the income distribution". (PMC)