Question

Describe how to calculate a Gino coefficient and explain a Lorenz curve

Describe how to calculate a Gino coefficient and explain a Lorenz curve

Homework Answers

Answer #1

Lorenz curve plots the cumulative percentage of income earned against the cumulative percentage of population arranged in ascending order of income earned.

Gini coefficient = A/(A + B) (= area bounded between line of equality and Lorenz curve (A) /area bounded by the line of equality and the two axes (A + B))

It is zero when there is perfect equality and 1 when there exists perfect inequality.

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