## How to interpret a Lorenz curve

To interpret a Lorenz curve, compare it to the line of perfect equality. A perfect equality line is a diagonal line from the bottom left to the top right. The curve represents income distribution. If the Lorenz curve lies below the perfect equality line, wealth inequality is present. Conversely, if it coincides with the equality line, perfect income equality exists. The further the curve deviates from the equality line, the more pronounced income inequality is. To quantify this inequality, the Gini coefficient is used. A higher Gini coefficient implies greater income inequality within the analyzed population.

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