Advantages : 1.provides visual representation of information about inequality and distribution of wealth prevailing in the society. 2. We could superimpose many Lorenz curve into same diagram. So we could see change in wealth distribution over different points of time. 3. Even if the shape of Lorenz curve is not changing significantly poor members of the society still be much better off in terms of what they can afford to buy. Disadvantages : 1. Lorenz curve may understate the actual amount of inequality if the richer ones use their wealth efficently than lower households. 2.For all statistics there can be systematic and random errors in data.. So gini coefficient changes according because the data is less accurate These are some of the merits and demerits of Lorenz curve..and u can connect associated points if u like And kindly plz like share and subscribe to my channel It's my pleasure to help you Thank u😍
The Gini Coefficient, which is derived from the Lorenz Curve, can be used as an indicator of economic development in a country. The Gini Coefficient measures the degree of income equality in a population. The Gini Coefficient can vary from 0 (perfect equality) to 1 (perfect inequality). Gini Coefficient of zero means that everyone has the same income, while a Coefficient of 1 represents a single individual receiving all the income. I hope u are satisfied with the answer. It's my pleasure to help u. Please like share and subscribe to my channel Thank you so much and God bless 😇
