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A hybrid method for creating Lorenz curves

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  • Wang, ZuXiang
  • Smyth, Russell

Abstract

We first suggest a bi-parametric Lorenz curve and then analyze the curvature structure of the function. We then build a series of single-parameter Lorenz curves with varied curvatures, which are special cases of the rational function. A hybrid method is then introduced for creating efficient functional models for the Lorenz curve from the single-parameter functional forms. Using grouped income distribution data for the United States, we find that our proposed models perform well.

Suggested Citation

  • Wang, ZuXiang & Smyth, Russell, 2015. "A hybrid method for creating Lorenz curves," Economics Letters, Elsevier, vol. 133(C), pages 59-63.
  • Handle: RePEc:eee:ecolet:v:133:y:2015:i:c:p:59-63
    DOI: 10.1016/j.econlet.2015.05.015
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    References listed on IDEAS

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    1. Rohde, Nicholas, 2009. "An alternative functional form for estimating the Lorenz curve," Economics Letters, Elsevier, vol. 105(1), pages 61-63, October.
    2. Kwang Soo Cheong, 2002. "An empirical comparison of alternative functional forms for the Lorenz curve," Applied Economics Letters, Taylor & Francis Journals, vol. 9(3), pages 171-176.
    3. Kakwani, N C & Podder, N, 1973. "On the Estimation of Lorenz Curves from Grouped Observations," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(2), pages 278-292, June.
    4. Zuxiang Wang & Yew‐Kwang Ng & Russell Smyth, 2011. "A General Method For Creating Lorenz Curves," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 57(3), pages 561-582, September.
    5. Ogwang, Tomson & Rao, U. L. Gouranga, 2000. "Hybrid models of the Lorenz curve," Economics Letters, Elsevier, vol. 69(1), pages 39-44, October.
    6. Kakwani, Nanak C & Podder, N, 1976. "Efficient Estimation of the Lorenz Curve and Associated Inequality Measures from Grouped Observations," Econometrica, Econometric Society, vol. 44(1), pages 137-148, January.
    7. Chotikapanich, Duangkamon, 1993. "A comparison of alternative functional forms for the Lorenz curve," Economics Letters, Elsevier, vol. 41(2), pages 129-138.
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    Cited by:

    1. Satya Paul & Sriram Shankar, 2020. "An alternative single parameter functional form for Lorenz curve," Empirical Economics, Springer, vol. 59(3), pages 1393-1402, September.
    2. Sarabia, José María & Prieto, Faustino & Jordá, Vanesa, 2015. "About the hyperbolic Lorenz curve," Economics Letters, Elsevier, vol. 136(C), pages 42-45.
    3. Wang, Yuanjun & You, Shibing, 2016. "An alternative method for modeling the size distribution of top wealth," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 457(C), pages 443-453.
    4. Wang, Zheng-Xin & Zhang, Hai-Lun & Zheng, Hong-Hao, 2019. "Estimation of Lorenz curves based on dummy variable regression," Economics Letters, Elsevier, vol. 177(C), pages 69-75.
    5. Andrew C. Chang & Phillip Li & Shawn M. Martin, 2018. "Comparing cross‐country estimates of Lorenz curves using a Dirichlet distribution across estimators and datasets," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 33(3), pages 473-478, April.

    More about this item

    Keywords

    Lorenz curve; Parametric form; Hybrid method;

    JEL classification:

    • C80 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - General
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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