What's the best way to measure economic inequality?

A few things are clear about economic inequality in the U.S. We know that it exists, that it's worse than it was 50 years ago, and that it varies somewhat from state to state.

Other aspects are less clear. For example, economists are split on "how much inequality there is and how best to measure it," says Drew DeSilver of the Pew Research Center.

Take these three statistics about economic inequality in the U.S.:

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Though all three depict an unequal society, they paint three distinct pictures — the third being the most worrisome by far.

So which is the "truest" measure?

The first stat, from a study by the American Enterprise Institute, measures inequality by expenditure. The idea is that "what matters is someone’s actual standard of living, regardless of how it is attained," according to the National Academy of Sciences. Whether you're buying groceries with a Social Security check, a year-end bonus, or a credit card is irrelevant; it only matters that you're buying groceries. This method of measurement usually depicts the smallest gap in equality. The American Enterprise Institute used it to argue in 2012 that it shows that inequality has remained steady for decades, though other economists were quick to refute this.

The second stat measures inequality by income, using data from the U.S. Census Bureau. The National Academy of Sciences described the income stat as "appropriate to the view that what matters is a family’s ability to attain a living standard above the poverty level by means of its own resources." In this scenario, your paycheck counts, but the amount you receive in food stamps doesn't.

This is the measure the Census Bureau uses to calculate the Gini index — the most commonly used formula for economic inequality, according to the World Bank. The Gini is a number between zero and one, where zero represents a society where every person makes the same income, and one represents a society where one person makes all of the income. In the U.S., the Gini reached .463 last year.

But the income measure is not without fault. As DeSilver at Pew puts it, "Some economists say that income data have too many flaws to be the primary measure of inequality. For one thing, most income-inequality measures use income before taxes and transfer payments (such as Social Security, food stamps, and unemployment benefits), which act to reduce inequality." He says the Gini index for the U.S. drops to .380 when adjusted accordingly.

Scientific American explains other challenges with using the Gini to measure wealth:

In other words, for a clear picture of economic inequality, say some economists, data on income and expenditure are both necessary.

As for the third stat: This one accounts for something often left out of income analysis: Overall wealth, including stocks and other investments. It also accounts for people who have high expenses, like children in college, for example. That stat comes from Edward Wolff, an NYU economist who used data from Survey of Consumer Finances and other similar surveys. A 2011 study by Dan Ariely, a professor at Harvard Business School, and Michael Norton, a behavioral economist at Duke, backs it up.

"There's a strong case to be made that what we worry about when we worry about economic inequality makes much more sense in terms of wealth than income," says Ezra Klein on The Washington Post's WonkBlog. He uses the example of political power:

All of the measures — income, expenditure, and wealth — tell a different story about income inequality in the U.S., and they're all useful for understanding the big picture. But added up, one thing is clear: The gap between rich and poor is a big one.