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Income Thresholds and Income Classes

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Author Info
Conchita D'Ambrosio
Pietro Muliere
Piercesare Secchi

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Abstract

This paper proposes a method for detecting income classes based on the change-point problem. There is an increasing demand for such a method in the literature. Computation of polarization indices requires a pre-grouping of the incomes. Similarly, indices of social exclusion and sometimes indices of income inequality require detection of thresholds. The estimation procedure is implemented using a bootstrap technique. Finally, an application of the method to EU member states and to the United States is also considered.

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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.40157.de/dp325.pdf
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Publisher Info
Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 325.

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Length: 15 p.
Date of creation: 2003
Date of revision:
Handle: RePEc:diw:diwwpp:dp325

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Related research
Keywords: income distribution; change-point; thresholds.;

Find related papers by JEL classification:
D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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  1. Esteban, J.M. & Ray, D., 1992. "On the Measurement of Polarization," UFAE and IAE Working Papers 171.92, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
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