### The Lorenz curve and Gini coefficient

By **EnhanceTuition** on youtube.com

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In this video we'll learn about the Lorenz curve and how it is used to measure inequality. From there we will calculate the Gini coefficient and understand what its value tells us. The Lorenz curve is used to measure the distribution of income across a population, where a perfect equality would be represented by a line. The Gini coefficient is calculated by dividing the area of A (above the Lorenz curve) by the total area under the line of perfect equality, with a value of 0 indicating perfect equality and a value of 1 indicating higher inequality. The United States is ranked 39th in terms of inequality, while the most unequal countries are Lesotho, South Africa and Micronesia.

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