Lorenz curve , Applied Statistics

Assignment Help:

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.


Related Discussions:- Lorenz curve

Business reporting and analysis, You are a business analyst working for a c...

You are a business analyst working for a company called Combined Computers Pty Ltd. You have been asked to prepare a business report with statistics in it for the managing director

Regression model, Using a random sample of 670 individuals for the populati...

Using a random sample of 670 individuals for the population of people in the workforce in 1976, we want to estimate the impact of education on wages. Let wage denote hourly wage in

Normal probability plots, The Null Hypothesis - H0:  The random errors will...

The Null Hypothesis - H0:  The random errors will be normally distributed The Alternative Hypothesis - H1:  The random errors are not normally distributed Reject H0: when P-v

Multiple regression analysis, Complete the multiple regression model using ...

Complete the multiple regression model using Y and your combined X variables.  State the equation.  Next, make sure that you evaluate overall model performance with the Anova table

Convenience sampling, Convenience Sampling It means a convenient sample...

Convenience Sampling It means a convenient sample is obtained by selecting convents units from the universe. Convenient sample is also known as chunk. It   means a fraction of

Atmospheric circulation and precipitation, (a) Elevation (m)...

(a) Elevation (m) 0 400 800 1200 1600 2000 2400 2800 3200 4000 480

Regression, The 4 assumptions of regression: 1.       Variables are norm...

The 4 assumptions of regression: 1.       Variables are normally distributed 2.       Linear relationship between the independent and dependent variables 3.       Homosced

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd