What is the equation of the line of equality for the Lorenz curve? (1 Viewer)

[hayhay2012]

Thanks!

 

[crazy_paki123]

they dont ask for the equation?! They ask for the GINI index from it?

 

[hayhay2012]

Ok which is 0?

 

[deswa1]

y=x but you don't need it-> you can tell its this because at every point, the x axis equals the y axis (if that makes sense -> badly worded)

 

[hayhay2012]

Yeah I thought that I used maths to find the gradient and then subbed in numbers haha

 

[crazy_paki123]

yes it is y=x, at the straight line (y=x) the GINI index=0, meaning its a communist economy

 

[clarg]

I understand what you're saying, formula is:

A / A + B, where A is the area above the curve and B is the area below.

Most likely will not need to know that though.

 

[clarg]

But that is for any Gini coefficient not just line of equality, however it will give you 0 is there is perfect equality.

 

[deswa1]

I understand what you're saying, formula is:

A / A + B, where A is the area above the curve and B is the area below.

Most likely will not need to know that though.

Actually you do need to know this formula- it has been tested before I'm pretty sure in HSC (if not HSC than in CSSA or IND)

 

[clarg]

Haha thats why I said 'Most likely'. I would never personally take chances knowing the BOS.