Lorenz curve

Definition

A model developed by economist Max Lorenz in 1905. It represents a probability distribution of statistical values, and is often associated with income distribution calculations. For example, a Lorenz curve can show that the bottom 40% of households bring in 25% of a country's income. If income distribution were perfectly equal, 40% of households would bring in 40% of income.

Use Lorenz curve in a sentence

I had to see what the lorenz curve had to say, because it was important to know what the probability distribution was.

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The lorenz curve was useful in assessing the relationships of all people in an economy with regards to funds transferring.

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When you are presenting facts and figures in your report on wealth distribution it is always good to use the Lorenz curve.

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