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Distribution of personal income: Development of a new model and its application to U.S. income data
Author(s) -
Majumder Amita,
Chakravarty Satya Ranjan
Publication year - 1990
Publication title -
journal of applied econometrics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.878
H-Index - 99
eISSN - 1099-1255
pISSN - 0883-7252
DOI - 10.1002/jae.3950050206
Subject(s) - econometrics , generalized beta distribution , personal income , distribution (mathematics) , income distribution , mathematics , income elasticity of demand , economics , statistics , probability distribution , inequality , distribution fitting , mathematical analysis , macroeconomics
This paper proposes a four‐parameter statistical model of the personalized distribution of income using the ‘income share elasticity’ approach suggested by Esteban (1986). Our proposed model includes the Singh–Maddala (1976) and Dagum (1977) distributions as special cases. The generalized beta II distribution of McDonald (1984) is also a variant of this model. It appears to give an excellent fit to US income data and its empirical performance turns out to be superior to those of the Singh–Maddala (1976), Dagum (1977), the five‐parameter Champernowne (1953) distributions and the generalized beta II distribution of McDonald (1984) on some data.