Have a look at actual income distribution in the United States available on the Web site 3http://www.census.gov/hhes/income/histinc/histinctb.html4. Select Households, and then Table H-2.

a. Plot the Lorenz curve for 1981 and 2001. Clearly label each curve. What can you say about the evolution of inequality over time?

b. Based on your diagram, can we conclude that the Gini coincident was higher in 1981 or 2001? Explain. Check your answer by consulting Table H-4 on the Web site.

c. Can we conclude from the diagram that the poor were necessarily worse o¤ in either 1981 or 2001? Why or why not? Use Table H-1 on the Web site to refine your answer.

d. Now suppose that people with similar incomes are more likely to get married than people with dissimilar incomes. How would this change affect the Lorenz curve drawn in part a?