## Definition of Lorenz curve Calculation and interpretation of Gini coefficient Use of Lorenz curve in measuring income inequality Limitations and criticisms of Lorenz curve analysis Applications of Lorenz curve analysis in policy-making and economics resea

The Lorenz curve shows income distribution across a population, Gini coefficient quantifies inequality. Analyze income inequality. Limitations include assuming a linear relationship, criticisms point out its simplification. Policy-making and economic research use analyze distribution fairness.

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## Applications of Lorenz curve in economics

The Lorenz curve helps study income inequality by showing how wealth is distributed among households. Economists use it to analyze disparities in income distribution and measure the effectiveness of economic policies aimed at reducing inequality. By comparing the Lorenz curves of different countries, policymakers can assess the impact of various social and economic programs. This curve provides a visual representation of income inequality, with the diagonal line representing perfect equality. The further the Lorenz curve deviates from this line, the greater the income inequality in a society. Understanding and interpreting the Lorenz curve can guide policymakers in designing more equitable and effective economic policies.

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