The table below shows the share of income going to each quintile of the income distribution for a nation in 1995 and 2015. Use this data to calculate what the points on a Lorenz curve would be, and sketch the Lorenz curve. The purple line represents 1995. The green line represents 2015. Share of Income Received 1995 2015 Bottom 20% 10% 5% Bottom 40% 20% 15% Bottom 60% 45% 35% Bottom 80% 75% 70% All 100% 100% 100% Provide your answer below: 110 100 * 90 80 490, 70) 70 (100, 70) 60 Perfect Equality (100,50 Year 2015 50 (80,50) Year 1995 -40 (70, 30) 30 (50, 20) 20 (90 20) 10 ( 60 10) 100 Income Quintiles 20 40 60 80 -10- | Cumulative Share of Income
The graphical depiction of the income distribution is known as the Lorenz curve. The cumulative percent of income is plotted against the cumulative percent of the population in this graph. Income inequality will be large if the Lorenz curve is distant from the line of equality, and vice versa.
Gini coefficient ranges from the value 0 to 1. Perfect equality is represented by a 0 number, whereas perfect inequality is represented by a 1. The Lorenz curve demonstrates that the more the Lorenz curve deviates from the line of equality, the more unequal the situation.
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The table below shows the share of income going to each quintile of the income distribution for a nation in 1955 and 2015. Use this data to calculate what the points on a Lorenz curve would be, and sketch the Lorenz curve.
The purple line represents 1955.
The green line represents 2015.
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