The Lorenz Curve
- Levels: AS, A Level, IB
- Exam boards: AQA, Edexcel, OCR, IB, Eduqas, WJEC
The Lorenz curve is the graphical / visual representation of income or wealth distribution developed by American economist Max Lorenz in 1905.
It is drawn as a cumulative income curve. A population is divided into quintiles: The richest quintile is the 20% of households with the highest disposable income. Similarly, the poorest quintile is the 20% of households with the lowest disposable income.
The Lorenz Curve can then be contrasted with the line of perfect equality to show the scale of income and wealth inequality in a country.
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- Lorenz Curve
- Economic Inequality
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- Gini coefficient
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Geoff Riley
Geoff Riley FRSA has been teaching Economics for nearly thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.
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