Compare the Lorenz curve for N with the concentration curve for N (using X as the ranking variable). What does this tell you?.

Answer

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

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

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

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

RESULTS

• Recall: A net tax T will cause reranking (and hence horizontal inequity) if and only if CN(p) > LN(p) for at least one
  value of p Î ]0; 1[