The Lorenz curve is a graphical representation of how income or wealth is distributed across a population.
Economist Max O. Lorenz developed the curve in 1905 to study inequality in wealth distribution. It plots the cumulative share of the population, ranked from poorest to richest, against the cumulative share of total income or wealth they possess. For example, a point can show what fraction of total income belongs to the bottom 20% of households.
A perfectly equal distribution appears as a straight 45-degree line, called the line of perfect equality. The farther the observed Lorenz curve bows below that line, the greater the inequality. The Gini coefficient summarizes this separation numerically, using areas associated with the curve and the equality line.
The Lorenz curve is often confused with the Kuznets curve. The Lorenz curve describes inequality within a distribution; the Kuznets curve proposes a relationship between economic development and inequality over time. Lorenz curves can also describe wealth, assets, species abundance, health outcomes, and other uneven distributions—not just wages.