Lorenz Curve

Definitions

Economics

  • noun
    (written as Lorenz curve)
    a curve developed by the economist Max Lorenz which shows the inequality of incomes, plotting cumulative income against the cumulative variable of the population which is being examined

Health Economics

  • The Lorenz curve was developed by Max Lorenz (1880-1962), a US economist who developed it to describe income inequalities. It shows the cumulative percentage of income, health care expenditures, etc. held by successive percentiles of the population. The percentage of individuals or households is plotted on the horizontal axis, the percentage of income, health care expenditures, etc. on the vertical axis. A perfectly equal distribution, where each has the same, appears as a straight line called the line of equality. A completely unequal distribution, where one person has everything, appears as a mirror L shape. This is a line of perfect inequality.
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