Monday, August 4, 2008

Lorenz Curve

- How a Lorenz curve works: The dashed line shows how the data would be graphed if income were equally distributed. The solid dark line (the Lorenz curve) represents the actual distribution.

- This Lorenz curve follows the diagonal 'line of income equality', where 50 per cent of the population receives 50 per cent of the income, 60 per cent of the population receives 60 per cent of the income, and so on. Chart A1.2 shows that the poorer 50 per cent of the Scottish population in 2005/06 received only 28 per cent of the total income, with the richer 50 per cent receiving 72 per cent of total income.

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