Now you can use what you learned to answer the questions that motivated this module:


Does Australia have more inequality than India?

First, we will use the Lorenz tool to determine if the countries can be ranked by the Lorenz criterion.

Lorenz Curves for Australia and India in 2019


Australia’s Lorenz curve is closer to the line of perfect equality. Therefore, Australia has less inequality than India.


Has inequality in the US risen or fallen since 2000?

We can use the Lorenz tool to display the Lorenz curves for the US in 2000 and 2019.

Lorenz Curves for the USA in 2000 and 2019


The Lorenz curves cross, so we are unable to use the Lorenz criterion to rank inequality in the US across time. In these cases, we compare the Gini coefficient. By looking at the graph, even though the curves cross in the first decile, we can already anticipate that the US’ Gini coefficient in 2019 is larger. This is because the area of the gap between 2019’s Lorenz curve and the line of perfect equality appears to be greater than the area of the gap in 2000. Therefore, the US has more inequality today than in 2000.