Where do we apply the Lorenz curve?

The Lorenz curve is applied to find the income inequality in a population. The area between the curve and the equality line is the gini coefficient. The Gini index is used to compare the economic, income inequality of different nations. You can read about the Lorenz Curve: Definition, Explanation and Relevant Questions in the given link.

If the gini coefficient is higher then it implies the income inequality is higher. If the gini coefficient is lower then it implies that the income inequality is lower.

Further readings:

  1. Gini Coefficient – Definition, Calculation and India’s Rankings
  2. Income Inequality In India: Background, Factors and Conclusion

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