Figure 2.4b: Gini Coefficients from Various Lorenz Curves

Imagine a standard diagram used to show income distribution, with cumulative population percentage on the horizontal axis and cumulative income percentage on the vertical axis. The diagram includes a straight diagonal line representing perfect income equality. Two countries, Country A and Country B, are plotted on this diagram. The curve representing Country A is positioned significantly farther away from the line of perfect equality than the curve for Country B. Based on this visual information

Policy Impact on Income Distribution

On a standard income distribution diagram, if the area between the line of perfect equality and a country's Lorenz curve becomes smaller over time, this indicates that the country's Gini coefficient is increasing.

Calculating an Inequality Index from a Distribution Graph

The Relationship Between Lorenz Curve Geometry and Inequality Measurement

Formula for the Gini Coefficient Using Areas A and B