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Question
Which of the following is used for the measurement of distribution of income?
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Solution
The correct option is C Gini-Lorenz Curve
Gini-Lorenz curve portrays the graph between cumulative shares of people from lowest to highest income versus cumulative share of income earned. It has a line of perfect equality in distribution of wealth with a slope equal to 1 against a curved line which represents unequal distribution of wealth (Lorenz curve). The area between the two lines is the Gini coefficient which measures the degree of inequality. Higher the Gini coefficient greater is the inequality and vice versa.
Gini-Lorenz curve portrays the graph between cumulative shares of people from lowest to highest income versus cumulative share of income earned. It has a line of perfect equality in distribution of wealth with a slope equal to 1 against a curved line which represents unequal distribution of wealth (Lorenz curve). The area between the two lines is the Gini coefficient which measures the degree of inequality. Higher the Gini coefficient greater is the inequality and vice versa.
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