Definition
- Lorenz curve
- A Lorenz curve is a graph comparing the cumulative share of income actually received with a perfectly equal distribution of income.
- Not to be confused with: Line of perfect equality
- The line of perfect equality is the diagonal where the bottom forty per cent of people get forty per cent of income, and so on for every share.
Test yourself
What is the difference between lorenz curve and line of perfect equality?
Line of perfect equality: The line of perfect equality is the diagonal where the bottom forty per cent of people get forty per cent of income, and so on for every share.