Lorenz curve , Applied Statistics

Lorenz Curve  

1014_lorenz curve.jpg

It is a graphic method of measuring dispersion. This curve was devised by Dr. Max o Lorenz a famous statistician.  He used this technique for wealth it is used to show inequality of wealth and income of a group of people. It is a simple attractive and effective measure of dispersion yet it is not scientific since it does not provide a figure to measure dispersion. The following procedure is followed in plotting the curve on a graph paper:

(1) The values given in a question or mid values are made cumulative. The percentages of different cumulative totals are computed taking last cumulative item as 100.

(2) The frequencies are also cumulated and percentages of cumulative frequency are calculated taking last cum. Frequencies are shown on and percentages of cumulative values on y axis.

(3) Percentages of cumulative frequencies   are shown on x-axis and percentages of cumulative values on y- axis.

(4)  The scale on x-axis will begin with 100 and proceed to zero and the scale on y- axis will start with 0 and proceed up to 100.

(5) A straight line is drawn going 0 on x- axis and the  point 100 on y-axis this line is called line of equal distribution.

(6) Then points are plotted   on the graph paper on the basis of calculated percentages on x-axis and y-axis. All the points are joined by a line called Lorenz curve.

(7) The greater is the distance between the curve and the line of equal distribution, the greater will be the dispersion. The nearer curve will mean less dispersion.

Posted Date: 9/27/2012 6:12:52 AM | Location : United States







Related Discussions:- Lorenz curve , Assignment Help, Ask Question on Lorenz curve , Get Answer, Expert's Help, Lorenz curve Discussions

Write discussion on Lorenz curve
Your posts are moderated
Related Questions
Universe or Population The word universe as used in statistics denotes the aggregate from which a sample is to be taken. According to Simpson and Kafka, a universe or populatio


You are interested in testing the distance of two golf balls, Brand A and Brand B. You take a random sample of 100 golfers, each of whom hits Brand A once and Brand B once. Define

Use only the rare event rule, and make subjective estimates to determine whether events are likely. For example, if the claim is that a coin favors heads and sample results consis

A manufacturer has received complaints that aging production equipment is forcing workers to work overtime in order to meet production quotas. Historically, the average hours worke

what is the aim of statistics?

For the following questions we are interested in a comparison of the 16 years education vs. > 16 years. (Recall we did the analysis on the log scale, so these are actual means on t

If the test is two-tailed, H1:  μ ≠  μ 0  then the test is called two-tailed test and in such a case the critical region lies in both the right and left tails of the sampling distr

1. Recognize and explain the opportunities for statistical learning. 2. Describe how the use of statistics supports student learning. 3. Recognize appropriate data displays a

To study the physical fitness of a sample of 28 people, the data below was collected representing the  number of sit-ups that a person could do in one minute.      10    12