Application of Lorenz distribution function in Commodity Science

Abstract

Background. The distribution of cost parameters of goods and services on the market corresponds to income distribution of certain population groups and is described by Max Otto Lorenz curve. It is clear that total consumer spending is an indicator of the economic condition of society, and distribution of cost parameters for particular products reflects the level of customer satisfaction. Studying the distribution cost parameters separately for different groups of products, we have identical distribution of these indices in the space of the Lorenz curve.
Purpose of work is to demonstrate the applicability of the identified patterns to solve the problems of commodity.
Material and methods. Considering close relationship of Lorenz curve with the schedule distribution cost parameters in the markets of goods, it is possible to describe this pattern by the formula: C = a2n, where: C – value of goods; a – coefficient of proportionality and the base of evaluation; n – the number of positive information about product quality in bits. On the basis of patterns and by watching real indicators of the value of goods in the markets, it is possible to indirectly calculate Lorenz curve for solving the problems of commodity.
Results. These examples show that studying the nature of the distribution cost parameters for the same of destination products on the market allows you to calculate the parameters of the Lorenz curve in a certain range and determine the total equity in the distribution of wealth produced by society. It was found that the level of indicators of value on the diamond jewelry from the first commodity group (average price) is not available for the second group of consumers, but is already available for the third one. It was proved that only 3.6 % of the total the number of citizens of Ukraine can satisfy their humanitarian needs by buying jewelry with diamonds.
For modern society Lorenz curve has the form described by value relevant groups of commodities, taking into account the minimum wage:
C = 1218 * 2n, where n – number of group consumption.
The interval of cost indicators for diamond jewelry is divided into 5 parts (%) by Lorenz: 0; 20; 40; 60; 80; 100. Gradient linear growth rate value is calculated and determined for each of the intervals optimal level of consumption. Results indicate that only part of the wealth produced in the Ukrainian economy (39 %) is used to meet the needs of public consumption.
Conclusion. Lorenz curve is theoretically (and thus the definition and cited arguments) described by formulated laws, it is of exponential character and is a reflection of the financial capacity of potential consumers of goods and services on the market. Predicting the market value of goods can be carried on the basis of the principle "Cost of goods corresponds to the financial capacity of buyers". It is important to implement the practices in assessment activities and especially for predicting the value of goods that meet the humanitarian needs of citizens – art, jewelry, travel services and more.