Friday, July 11, 2014

Accumulation Line Graph


An accumulation line graph, also called a Lorenz curve, consists of a  line on the graph which shows how the data would be graphed if whatever property being measured was equally distributed. Then there is another  line, called the Lorenz curve, which represents the actual distribution of whatever feature under study. From viewing the distribution/accumulation of the graph a trend can then be found. In economics, a Lorenz curve is a graphical representation of the cumulative distribution of the empirical probability distribution of wealth, first developed by Max Lorenz in 1905 for representing inequality in wealth distribution. Accordingly, the accumulation line graph is often used to display income distribution. The above image is a clear example of a accumulation line graph or Lorenz curve of income distribution, in which the Lorenz curve is obtained by plotting the cumulative percentages of household income against the cumulative percentages of the number of household, starting from the homes with the lowest income. The Lorenz curve would be the line of equality if there was an absolutely equal distribution of income. However, since it is not equally distributed, the degree of income disparity is reflected by the amount that the Lorenz curve concaves against this line of equality. So, a trend could be made here that the closer the Lorenz curve is to the line of equality, the smaller the amount of income disparity there is.

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