Economics & inequality
Lorenz Curve
Definition
The Lorenz curve, developed by Max O. Lorenz in 1905, plots the cumulative percentage of total income (or wealth) received against the cumulative percentage of recipients ranked from poorest to richest. The line of perfect equality is a 45-degree diagonal; the further the curve bows below it, the greater the inequality. The Gini coefficient is derived from it as the area between the curve and the diagonal divided by the total area under the diagonal (A/(A+B)).
References
definition, 1905 origin, Gini derivation
interpretation and comparative use
Overview
What it means
A point on the curve such as (0. 8, 0. 5) means the poorest 80% of the population receives 50% of income. Curves for different countries or years can be compared directly.
How it is used
Economists, development agencies and sustainability analysts use Lorenz curves and derived Gini coefficients to track inequality, evaluate distributional effects of policies, and report on SDG 10 (reduced inequalities).
Why it matters
Inequality is a core sustainability concern: highly unequal societies face social instability and weaker collective capacity to address environmental challenges, and the Lorenz curve is the standard visual tool for measuring it.