Problem 24

Introduction

In economics, the Lorenz curve is a graphical representation of the distribution of income or of wealth. It was developed by Max O. Lorenz in 1905 for representing inequality of the wealth distribution.

The curve shows the proportion of income earned by any given percentage of the population. The line at the 45º angle (represented in the graph below by the line marked “Perfect Equality”) has a slope of 1 and shows perfectly equal income distribution.