Compare the Lorenz curve of per capita total expenditures (EXPCAP), using SIZE, and of total expenditures (TTEXP). Which type of expenditures is more equally distributed? Why?

1. To understand better why, add to the graph a concentration curve of total expenditures, using per capita expenditures as the ranking variable, and WHHLD to count observations; this will indicate the concentration of total
   expenditures among the poorest households, ranked by per capita expenditures.

2. To complete your understanding, add a concentration curve for household size, using WHHLD as the aggregating weight and EXPACP as the ranking variable; this will indicate the concentration of individuals among the poorest households, as ranked by EXPCAP. Does this help you understand the difference between the above two Lorenz curves?

Answer

• After choosing the appropriate variable(s), click on  the button OK.

STEP 2: Use the DAD Application: CURVES|LORENZ CURVE

• After choosing the appropriate variable(s) and parameters, click on the GRAPH button.

RESULTS

• Comparing the two Lorenz curves, inequality of total expenditures is higher than that of total expenditures per capita.

• a & b

STEP 1: Use the DAD Application: CURVES|CONCENTRATION CURVE

• After choosing the appropriate variable(s) and parameters, click on the GRAPH button.

RESULTS