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Economic Development Assignment Ahmed Raafat

The document discusses key concepts related to economic development, focusing on the Lorenz Curve and Gini Coefficient as tools to measure income inequality. It explains that the Lorenz Curve visually represents income distribution, while the Gini Coefficient quantifies inequality on a scale from 0 to 1. Additionally, it addresses the implications of income inequality and the size distribution of income within a population.

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14 views5 pages

Economic Development Assignment Ahmed Raafat

The document discusses key concepts related to economic development, focusing on the Lorenz Curve and Gini Coefficient as tools to measure income inequality. It explains that the Lorenz Curve visually represents income distribution, while the Gini Coefficient quantifies inequality on a scale from 0 to 1. Additionally, it addresses the implications of income inequality and the size distribution of income within a population.

Uploaded by

aborafat272
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Economic Development

Assignment

Dr/ Haitham

Gamal By/

Ahmed Raafat

Code/ 220367
Lorenz Curve

The Lorenz Curve is a graphical representation

used to show income or wealth distribution within

a country or group. It plots the cumulative

percentage of total income received by the

cumulative percentage of recipients, starting from

the poorest to the richest.

In a perfectly equal society, the Lorenz Curve

would be a straight 45-degree line, known as the

line of equality. The more the curve bows away

from this line, the more inequality there is. This

curve is useful in analyzing how evenly or

unevenly income is distributed among the

population.
Gini Coefficient

The Gini Coefficient is a numerical measure of

income inequality derived from the Lorenz Curve.

It ranges from 0 to 1:

- A Gini coefficient of 0 represents perfect equality


(everyone has the same income).

- A Gini coefficient of 1 represents perfect


inequality (one person has all the income).

This measure is commonly used by economists and

governments to evaluate and compare income inequality

between countries or over time.


Income Inequality

Income Inequality refers to the extent to which

income is distributed unevenly among a

population. In a society with high income

inequality, a small percentage of people control a

large portion of the income, while many others

have very little.

This inequality can result from various factors

such as education, employment opportunities,

economic policies, and inheritance. High income

inequality can lead to social tension, reduced

economic growth, and unequal access to services

like healthcare and education.


Size Distribution of Income

The Size Distribution of Income describes how

total income is divided among individuals or

groups in an economy. It focuses on how much

income each "size" or segment of the population

earns, such as the top 10%, middle 40%, or

bottom 50%.

This concept helps identify which groups benefit

most from economic growth and whether wealth

is concentrated in the hands of a few or spread

more equally. It is closely related to income

inequality and is often shown using the Lorenz

Curve or data tables.

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