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Estimation Of Income Distribution And Detection Of Subpopulations: An Explanatory Model

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  • Emmanuel Flachaire
  • Olivier G. Núñez

    ()

Abstract

Inequality and polarization analyses are complementary but conceptually different. They are usually implemented independently in practic e, with different a priori assumptions and different tools. In this paper, we develop a unique method to study simultaneously these different and complementary concerns. Based on mixture models, the method we develop includes at the same time : an estimation of income distribution with no a priori assumptions - a decomposition in several homogeneous subpopulations - an explanatory model to study the structure of the income distribution.

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Bibliographic Info

Paper provided by Universidad Carlos III, Departamento de Estadística y Econometría in its series Statistics and Econometrics Working Papers with number ws030201.

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Length: 20 pages
Date of creation: Jan 2003
Date of revision:
Handle: RePEc:cte:wsrepe:ws030201

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References

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  1. Davidson, R. & Duclos, J.-Y., 1998. "Statistical Inference for Stochastic Dominance and for the Measurement of Poverty and Inequality," G.R.E.Q.A.M. 98a14, Universite Aix-Marseille III.
  2. Schluter, Christian & Trede, Mark, 2002. "Tails of Lorenz curves," Journal of Econometrics, Elsevier, vol. 109(1), pages 151-166, July.
  3. Russell Davidson & Emmanuel Flachaire, 2004. "Asymptotic and bootstrap inference for inequality and poverty measures," Cahiers de la Maison des Sciences Economiques v04100, Université Panthéon-Sorbonne (Paris 1).
  4. Cowell, Frank A & Jenkins, Stephen P, 1995. "How Much Inequality Can We Explain? A Methodology and an Application to the United States," Economic Journal, Royal Economic Society, vol. 105(429), pages 421-30, March.
  5. Russell Davidson & Jean-Yves Duclos, 1997. "Statistical Inference for the Measurement of the Incidence of Taxes and Transfers," Econometrica, Econometric Society, vol. 65(6), pages 1453-1466, November.
  6. McDonald, James B, 1984. "Some Generalized Functions for the Size Distribution of Income," Econometrica, Econometric Society, vol. 52(3), pages 647-63, May.
  7. Levy, Frank & Murnane, Richard J, 1992. "U.S. Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1333-81, September.
  8. Pudney, Stephen, 1993. "Income and Wealth Inequality and the Life Cycle: A Non-parametric Analysis for China," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 8(3), pages 249-76, July-Sept.
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  12. Shorrocks, A F, 1980. "The Class of Additively Decomposable Inequality Measures," Econometrica, Econometric Society, vol. 48(3), pages 613-25, April.
  13. Weiss, Yoram, 1972. "The Risk Element in Occupational and Educational Choices," Journal of Political Economy, University of Chicago Press, vol. 80(6), pages 1203-13, Nov.-Dec..
  14. Jenkins, Stephen P, 1996. "Recent Trends in the UK Income Distribution: What Happened and Why?," Oxford Review of Economic Policy, Oxford University Press, vol. 12(1), pages 29-46, Spring.
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  16. Furman, W. David & Lindsay, Bruce G., 1994. "Measuring the relative effectiveness of moment estimators as starting values in maximizing likelihoods," Computational Statistics & Data Analysis, Elsevier, vol. 17(5), pages 493-507, June.
  17. Jenkins, Stephen P., 1995. "Did the middle class shrink during the 1980s? UK evidence from kernel density estimates," Economics Letters, Elsevier, vol. 49(4), pages 407-413, October.
  18. Frank Cowell, 1998. "Measurement of inequality," LSE Research Online Documents on Economics 2084, London School of Economics and Political Science, LSE Library.
  19. Beach, Charles M & Davidson, Russell, 1983. "Distribution-Free Statistical Inference with Lorenz Curves and Income Shares," Review of Economic Studies, Wiley Blackwell, vol. 50(4), pages 723-35, October.
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Cited by:
  1. Dorothée Boccanfuso & Bernard Decaluwé & Luc Savard, 2008. "Poverty, income distribution and CGE micro-simulation modeling: Does the functional form of distribution matter?," Journal of Economic Inequality, Springer, vol. 6(2), pages 149-184, June.
  2. William E. Griffiths and Gholamreza Hajargasht, 2012. "GMM Estimation of Mixtures from Grouped Data:," Department of Economics - Working Papers Series 1148, The University of Melbourne.
  3. Longford, N.T. & Pittau, M.G., 2006. "Stability of household income in European countries in the 1990s," Computational Statistics & Data Analysis, Elsevier, vol. 51(2), pages 1364-1383, November.
  4. Ivana Malá, 2012. "The Use of Finite Mixtures of Lognormal Distribution for the Modelling of Income Distributions," Acta Oeconomica Pragensia, University of Economics, Prague, vol. 2012(4), pages 26-39.

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