Sunday, April 24, 2011

Lorenz Curve - South African household income

http://www.sarpn.org.za/documents/d0000990/
The lorenz curve is often used to show the distribution of income among households.  The percentage of households is printed on the y-axis and the percentage of income obtained is printed on the x-axis.  The blue line that moves diagonally through the graph is called the "line of perfect equality" and represents what the graph would look like if all of the wealth was equally distributed among the population.  The lorenz curve shows the deviation from this equality.  The bigger the area is between the "perfect equality" line and the lorenz curve is, the greater amount of inequality exists.

2 comments:

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  2. I am so glad to learn more and thank you for this information

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