Free «Lorenz Curve» Essay Sample

a)

Initial data at first:

  1 2 3 4 Total
Incomes 200 400 600 800 2000
People 100 50 150 50 350

Step 1: The calculation of the “% values”.

  1 2 3 4 Total
Incomes, % 10 20 30 40 100
People, % 28.57 14.28 42.85 14.28 100

Step 2: The calculation of the cumulative sums.

  1 2 3 4
Incomes, % 10 30 60 100
People, % 28.57 42.85 85.7 99.98

b)

Initial data at first:

  1 2 3 4 Total
Incomes 100 200 300 400 1000
People 50 35 55 35 175

Step 1: The calculation of the “% values”.

  1 2 3 4 Total
Incomes, % 10 20 30 40 100
People, % 28.57 20 31.43 20 100

Step 2: The calculation of the cumulative sums.

  1 2 3 4
Incomes, % 10 30 60 100
People, % 28.57 48.57 80 100

 

c)

Initial data at first:

  1 2 3 4 Total
Incomes 100 200 300 400 1000
People 75 40 50 10 175

Step 1: The calculation of the “% values”.

  1 2 3 4 Total
Incomes, % 10 20 30 40 100
People, % 42.86 22.86 28.57 5.71 100

Step 2: The calculation of the cumulative sums.

  1 2 3 4
Incomes, % 10 30 60 100
People, % 42.86 65.72 94.29 100

d)

Comments

To start with, the Lorenz curve that reflects initial data for c) deviates from bisector the most. This speaks a high polarization of society in terms of incomes. This means that in c) there exist a great gap of incomes between the richest- and the poorest people. If to speak about a) and b), these two variants show a quite similar result. However, there still exists one difference between them. The point is that in a) the middle of Lorenz curve approaches to bisector. This speaks about a strong middle class in society with the normal level of the differentiation of incomes.

 
   

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