Lorenz and Perfect Inequality Differences
This example considers 10 trucking companies and their market share. If each company had the same market share, the plot of their cumulative number (X) and cumulative traffic (Y) would be the perfect equality line. In this case, there is an unequal distribution of traffic with the three largest companies accounting for 60% of the market. The largest company accounts for 25% of the market and thus has a Lorenz difference of 15% (25%-10%) and an inequality difference of 75% (100%-25%). The Gini coefficient (G) would be calculated by dividing the summation of Lorenz differences by the summation of Lorenz differences added to the summation of inequality differences. G = 196 / (196+254) = 0.435.