A graph on which the cumulative percentage of total national income (or some other variable) is plotted against the cumulative percentage of the corresponding population (ranked in increasing size of share). The extent to which the curve sags below a straight diagonal line indicates the degree of inequality of distribution.
- The Lorenz curve plots the cumulative share of income held by the cumulative tenths of households ranked from the poorest to the most affluent.
- The closer the Lorenz curve to the diagonal line, the more equal is the distribution of income.
- To show the extent of inequality I have used Lorenz curves, which are easily interpreted.
Early 20th century: named after Max O. Lorenz, the American statistician who devised the curve.
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