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Lorenz Curve & Gini
AP Microeconomics · Income Inequality
Lorenz Curve

Graphically represents income inequality by plotting the cumulative percentage of households against the cumulative percentage of income they hold.

Areas & The Gini Coefficient
Perfect Equality: Straight line where 20% of people make 20% of income.
Area A: The gap between perfect equality and reality.
Area B: The area under the Lorenz Curve.
Tags
Income InequalityGini CoefficientLorenz CurveEconomics
Modify Inequality
Inequality Power Index: 1.0

Drag left for Perfect Equality (Communism/Ideal). Drag right for extreme inequality (1% holds 99%).

The Gini Coefficient
A / (A + B)
0.43
Bottom 50% owns: 10%
Top 10% owns: 40%