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    Question

    Lorenz Curve is given by:

    L(x) = 1/3 (X^3) + 2/3 (x^5). Calculate Gini Coefficient.

    A 17/30 Correct Answer Incorrect Answer
    B 11/18 Correct Answer Incorrect Answer
    C 21/30 Correct Answer Incorrect Answer
    D 31/30 Correct Answer Incorrect Answer
    E 41/50 Correct Answer Incorrect Answer

    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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