Wednesday, April 21, 2010

Lorenz Curve


Lorenz curves are used as an economic tool to determine the distribution of money in a particular region. The 45 degree angle drawn in bold represents 100% equality, meaning that every person makes the same amount of money if you are on that line. The further the curve gets from that line, the more unequal the distribution of money. The example above is showing Scotland's inequality in 2000-2001 compared to 2005- 2006. According to the Lorenz curve Scotland's distribution of money became more equal from 2000- 2006.

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