Income Thresholds and Income Classes
AbstractThis 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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Bibliographic InfoPaper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 325.
Length: 15 p.
Date of creation: 2003
Date of revision:
income distribution; change-point; thresholds.;
Find related papers by JEL classification:
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
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- Esteban, J. & Ray, D., 1993.
"On the Measurement of Polarization,"
UFAE and IAE Working Papers
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- 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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- Guillermo Cruces & Luis Felipe López Calva & Diego Battistón, 2011. "Down and Out or Up and In? Polarization-Based Measures of the Middle Class for Latin America," CEDLAS, Working Papers 0113, CEDLAS, Universidad Nacional de La Plata.
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