Lesson Plans
Lesson 2 | Measuring Income Inequality: The Lorenz Curve and Gini Coefficient
Introduction
In order to have a meaningful discussion around income inequality one has to understand how it is measured. The most commonly discussed measures by economists and politicians are the Lorenz Curve and Gini Coefficient. In this lesson, students construct a Lorenz Curve, learn how it is related to the Gini Coefficient and look at data for Canada and other nations on these measures. This lesson will allow students to engage in higher-level discussions around income inequality, and differentiate it from poverty, once they have a firm grasp of how they are measured.
Economic Concepts
- Gini Coefficient
- Income Inequality
- Lorenz Curve
Learning Objectives
- Create and interpret a Lorenz Curve illustrating distribution of income.
- Interpret a Gini Coefficient representing distribution of income.
- Understand how Canada ranks in comparison to other nations in income inequality using the Gini Coefficient statistic.