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.