Question
Lorenz Curve is given by:
dir="ltr">L(x) = 1/3 (X^3) + 2/3 (x^5). Calculate Gini Coefficient.Solution
The Gini coefficient is equal to the area below the line of perfect equality (0.5 by definition) minus the area below the Lorenz curve, divided by the area below the line of perfect equality. In other words, it is double the area between the Lorenz curve and the line of perfect equality.
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