The Lorenz curve visually shows income distribution within a population. It illustrates wealth inequality levels vividly. The curve portrays the share of total income held by different percentile groups across the population. It measures income disparities effectively and is commonly used in economics. The farther away the Lorenz curve is from the line of equality, the higher the wealth inequality. It is a crucial tool for policymakers and researchers concerned with social equity. Understanding the Lorenz curve helps in designing interventions to address wealth disparities proactively. It is a powerful visualization tool for analyzing income inequality comprehensively.

The Lorenz curve is a graphical representation showing income inequality in a society. It plots the cumulative share of total income against the corresponding population percentage. The curve's shape indicates the distribution of income: a more equal society has a curve closer to the diagonal, while a more unequal society has a curve that bends away from it. By comparing different Lorenz curves, economists can assess the level of inequality and measure the extent to which income is concentrated in certain segments of society. This information helps policymakers develop strategies to address inequality and promote fairer distribution of wealth.