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Testing for changing shapes of income distribution: Italian evidence in the 1990s from kernel density estimates

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  • Maria Grazia Pittau

    ()

  • Roberto Zelli

    ()

Abstract

By using nonparametric methods, this paper estimates the distribution of both household and size-adjusted real income in Italy between 1987–1998. Because of data sparseness in the distribution, an adaptive bandwidth is used, while to account for sample design a weighting variable is incorporated in the estimation procedure. The time invariance and the presence of modes in the distributions are tested by means of a nonparametric test and a bootstrap test, respectively. The empirical results suggest that the Italian income distribution significantly changed over time. During the eighties the density shifted rightwards, positively affecting the well being of a large fraction of Italian households. The 1993 recession altered the shape of income distribution increasing inequality and polarisation, and the following period of slow recovery did not show significant changes in the shape of distribution in terms of relative income with a consequent permanence of inequality. The polarisation of the distribution is more noticeable for size-adjusted income rather than whole household income, reflecting the influence of family size on income shape. Copyright Springer-Verlag 2004

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File URL: http://hdl.handle.net/10.1007/s00181-003-0175-3
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Bibliographic Info

Article provided by Springer in its journal Empirical Economics.

Volume (Year): 29 (2004)
Issue (Month): 2 (05)
Pages: 415-430

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Handle: RePEc:spr:empeco:v:29:y:2004:i:2:p:415-430

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Related research

Keywords: Income distribution; kernel density estimation; multimodality test;

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Cited by:
  1. Falko Juessen, 2009. "A distribution dynamics approach to regional GDP convergence in unified Germany," Empirical Economics, Springer, vol. 37(3), pages 627-652, December.
  2. Garance Genicot & Debraj Ray, 2014. "Aspirations and Inequality," NBER Working Papers 19976, National Bureau of Economic Research, Inc.
  3. Clementi, F. & Schettino, F., 2013. "Income polarization in Brazil, 2001-2011: A distributional analysis using PNAD data," 2013 Second Congress, June 6-7, 2013, Parma, Italy 149891, Italian Association of Agricultural and Applied Economics (AIEAA).
  4. Riccardo Massari, 2009. "Is income becoming more polarized Italy? A closer look with a distributional approach," Working Papers 1, Doctoral School of Economics, Sapienza University of Rome.

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