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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

Suggested Citation

  • Maria Grazia Pittau & Roberto Zelli, 2004. "Testing for changing shapes of income distribution: Italian evidence in the 1990s from kernel density estimates," Empirical Economics, Springer, vol. 29(2), pages 415-430, May.
    • Handle: RePEc:spr:empeco:v:29:y:2004:i:2:p:415-430
    DOI: 10.1007/s00181-003-0175-3
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    Citations

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    Cited by:

    1. Fabio Clementi & Francesco Schettino, 2013. "Income polarization in Brazil, 2001-2011: A distributional analysis using PNAD data," Economics Bulletin, AccessEcon, vol. 33(3), pages 1796-1815.
    2. Wang, Zheng-Xin & Jv, Yue-Qi, 2023. "Revisiting income inequality among households: New evidence from the Chinese Household Income Project," China Economic Review, Elsevier, vol. 81(C).
    3. Roy Cerqueti & Marcel Ausloos, 2015. "Statistical assessment of regional wealth inequalities: the Italian case," Quality & Quantity: International Journal of Methodology, Springer, vol. 49(6), pages 2307-2323, November.
    4. F. Clementi & A. L. Dabalen & V. Molini & F. Schettino, 2017. "When the Centre Cannot Hold: Patterns of Polarization in Nigeria," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 63(4), pages 608-632, December.
    5. Falko Juessen, 2009. "A distribution dynamics approach to regional GDP convergence in unified Germany," Empirical Economics, Springer, vol. 37(3), pages 627-652, December.
    6. Schettino, Francesco & Gabriele, Alberto & Khan, Haider A., 2021. "Polarization and the middle class in China: A non-parametric evaluation using CHNS and CHIP data," Structural Change and Economic Dynamics, Elsevier, vol. 57(C), pages 251-264.
    7. Garance Genicot & Debraj Ray, 2017. "Aspirations and Inequality," Econometrica, Econometric Society, vol. 85, pages 489-519, March.
    8. Paluch, Michal, 2004. "A Note on the Structural Stability of the Joint Distribution of Income and Wealth," Bonn Econ Discussion Papers 16/2004, University of Bonn, Bonn Graduate School of Economics (BGSE).
    9. Andrea Brandolini & Romina Gambacorta & Alfonso Rosolia, 2018. "Inequality amid income stagnation: Italy over the last quarter of a century," Questioni di Economia e Finanza (Occasional Papers) 442, Bank of Italy, Economic Research and International Relations Area.
    10. Khan, Haider & Schettino, Francesco, 2018. "Income Polarization in the USA (1983-2016): what happened to the middle class?," MPRA Paper 85554, University Library of Munich, Germany.
    11. 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.
    12. Peng Su & Xiaochun Jiang & Chengbo Yang & Ting Wang & Xing Feng, 2019. "Insufficient Consumption Demand of Chinese Urban Residents: An Explanation of the Consumption Structure Effect from Income Distribution Change," Sustainability, MDPI, vol. 11(4), pages 1-22, February.

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