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Income Distribution Modelling Using Conditional Mixture Distributions: New Zealand Incomes 1985-1994

Author

Listed:
  • Bakker, A.
  • Creedy, J.

Abstract

Many empirical income distributions are complicated by the existence of a second mode, found in the lower range of incomes. This phenomenon can be generated by the labour supply effects of means-tested transfer payments and the associated high effective marginal tax rates which have strong incentive effects. This means that it is often difficult to obtain a good fit to the complete range of the distribution using a single functional form of income distribution even where, as in the case of members of the generalised exponential family of distributions, multimodality can be modelled.

Suggested Citation

  • Bakker, A. & Creedy, J., 1998. "Income Distribution Modelling Using Conditional Mixture Distributions: New Zealand Incomes 1985-1994," Department of Economics - Working Papers Series 602, The University of Melbourne.
    • Handle: RePEc:mlb:wpaper:602
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    More about this item

    Keywords

    MODELS ; INCOME DISTRIBUTION;

    JEL classification:

    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation

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