What is a Lorenz Curve?
A Lorenz curve is a graphical representation of income or wealth distribution within a population. It plots the cumulative percentage of total income earned against the cumulative percentage of households or individuals.
The curve was developed by American economist Max O. Lorenz in 1905 to illustrate inequality. The further the curve is from the diagonal line of perfect equality, the greater the inequality.
How to Use This Tool
- Enter income values for different population groups in the data configuration panel
- Use preset examples (Equal, Unequal, Extreme) to quickly see different scenarios
- Adjust the number of population groups for more detailed analysis
- Toggle chart elements (grid, labels, equality line) for better visualization
- Click "Calculate & Update Chart" to see real-time results
- Export your data or chart image for reports and presentations
Understanding the Gini Coefficient
The Gini coefficient is a statistical measure of inequality derived from the Lorenz curve. It ranges from 0 (perfect equality) to 1 (perfect inequality).
- 0.0-0.2: Highly equal distribution
- 0.2-0.3: Relatively equal distribution
- 0.3-0.4: Moderate inequality
- 0.4-0.5: High inequality
- 0.5+: Very high inequality
Real-World Applications
Lorenz curves and Gini coefficients are used by economists, policymakers, and researchers to:
- Analyze income and wealth inequality within countries
- Compare inequality between different nations or regions
- Track changes in inequality over time
- Evaluate the impact of tax policies and social programs
- Study resource distribution in various fields
Tip: Try entering real-world data like income distribution statistics from your country to visualize actual inequality levels.