Question

4) According to the Lorenz curve that you found in the previous question, calculate the Gini index for both the US and China.

Previous question, Lorenz curve numbers:

Answer 1

Score = % of income * (%of population + 2 * %of population that is richer)

Gini Index = 1 - Score

For US:

% of population	% of income	% of income that is richer	Score
0.25	0.05	0.95	0.1075
0.25	0.15	0.8	0.2775
0.25	0.3	0.5	0.375
0.25	0.5	0	0.125
		Sum of score	0.885

Gini Index for US = 1 - 0.885 = 0.115

For China:

% of population	% of income	% of income that is richer	Score
0.25	0.05	0.95	0.1075
0.25	0.2	0.75	0.35
0.25	0.4	0.35	0.38
0.25	0.35	0	0.0875
		Sum of score	0.925

Gini Index for China = 1 - 0.925 = 0.075