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Regional Income Distribution in the European Union: A Parametric Approach

In: What Drives Inequality?

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  • Tsvetana Spasova

Abstract

This chapter studies trends in income distributions and inequality in the European Union using data from the European Union Statistics on Income and Living Conditions. The author models the income distribution for each country under a Dagum distribution assumption and using maximum likelihood techniques. The author uses parameter estimates to form distributions for regions defined as finite mixtures of the country distributions. Specifically, the author studies the groups of ‘new’ and ‘old’ countries depending on the year they joined the European Union. The author provides formulae and estimates for the regional Gini coefficients and Lorenz curves and their decomposition for all the survey years from 2007 through 2011. The estimates of this study show that the ‘new’ European Union countries have become richer and less unequal over the observed years, while the ‘old’ ones have undergone a slight increase in inequality which is however not significant at conventional levels.

Suggested Citation

  • Tsvetana Spasova, 2019. "Regional Income Distribution in the European Union: A Parametric Approach," Research on Economic Inequality, in: What Drives Inequality?, volume 27, pages 1-18, Emerald Group Publishing Limited.
    • Handle: RePEc:eme:reinzz:s1049-258520190000027002
    DOI: 10.1108/S1049-258520190000027002
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    More about this item

    Keywords

    Income distribution; Dagum distribution; finite mixtures; inequality; Gini decomposition; European Union; D31; D63; C13;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General

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