Tuesday, August 4, 2009

Lorenz Curve

In economics, the Lorenz curve is a graphical representation of the cumulative distribution function of a probability distribution; it is a graph showing the proportion of the distribution assumed by the bottom y% of the values. It is often used to represent income distribution, where it shows for the bottom x% of households, what percentage y% of the total income they have.

source: http://ingrimayne.com/econ/AllocatingRationing/Figure6.5.gif

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