Max Otto Lorenz, 1876-1959.
American
Institutionalist economist and
statistician.
Max Otto Lorenz was the son of German immigrants in Iowa. He studied at
the University of Iowa, completing his BA in 1899. He proceeded for
graduate study under Richard T. Ely and John R.
Commons at the University of
Wisconsin. Lorenz graduated in 1906
with a doctoral thesis on railway rates. Lorenz stayed on at Wisconsin as
an assistant for a few years. Making a name for himself as a railway rates
expert, Lorenz became a statistician at the Interstate Commerce Commission (ICC)
in Washington DC in 1911, and became director of its statistical bureau in 1920.
Max Lorenz is most famous introducing the "Lorenz Curve" (1905:
p.218) (albeit with axis reversed) as a way of depicting income distribution
in a society. It shows the different percentages of income in a society
received by different cumulative proportions of the population, from the bottom
to the top. Lorenz publishing his article while still a graduate student.
It was first named the "Lorenz curve" in a textbook by Wilford King in 1912.
Italian statistician Corrado Gini (1914) identified the
relationship between Lorenz's diagram and his own Gini coefficient measure.
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Major Works of Max O. Lorenz
- "Methods of Measuring the Concentration of Wealth", 1905, Pub ASA
(Jun),
p.209 [js,
av]
- "Wages and Family Budgets in Berlin", 1905, Pub ASA (Jun),
p.257 [js]
- "Railway Rates as Protective Tariffs: Another View", 1906, JPE
(Mar), p.170 [js]
- "Constant and Variable Railroad Expenditures and the Distance Tariff",
1907, QJE (Feb) [js]
- Outlines of Economics, revised edition, 1908 (with Richard T.
Ely, T.S. Adams, and Allyn A. Young)
[revised 1908
edition [av],
third 1916
ed. [av];
1924 4th ed.]
- "What Form of Workingmen's Accident Insurance Should Our States Adopt?",
1909 AEA Quarterly, p.135 [js]
- "Note: Workingmen's Insurance: Proposed codification of laws in
Germany", 1909, APSA (Nov), p.585 [js]
- "Cost and Value of Service in Railroad Rate-Making", 1916 QJE (Feb),
p.205 [js]
- "Locomotive Maintenance in Prosperity and Depression" 1934, J of Land
& Public Utility Economics (Feb), p.102 [js]
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Resources on M.O. Lorenz
- "Measurement of the Concentration of Wealth", by G.K. Holmes 1905,
(Sep)
p.318 [js] (reply
to Lorenz)
- "Comment on Lorenz and Holmes", by G.P. Watkins, 1905 (Dec),
p.349 [js]
- The Elements of Statistical Method by Wilford I. King, 1912 [bk,
av]
(first mention of "Lorenz Curve",
p.156 [av])
- "The Lorenz curve in economics and econometrics", by Christian Kleiber,
2005 [pdf]
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