Arbeitspapier
Is the Pareto-Lévy law a good representation of income distributions?
Mandelbrot (1960) proposed using the so-called Pareto-Lévy class of distributions as a framework for representing income distributions. We argue in this paper that the Pareto-Lévy distribution is an interesting candidate for representing income distribution because its parameters are easy to interpret and it satisfies a specific invariance-under-aggregation property. We also demonstrate that the Gini coefficient can be expressed as a simple formula of the parameters of the Pareto-Lévy distribution. We subsequently use wage and income data for Norway and seven other OECD countries to fit the Pareto- Lévy distribution as well as the Generalized Beta type II (GB2) distribution. The results show that the Pareto-Lévy distribution fits the data better than the GB2 distribution for most countries, despite the fact that GB2 distribution has four parameters whereas the Pareto-Lévy distribution has only three.
- Sprache
-
Englisch
- Erschienen in
-
Series: LIS Working Paper Series ; No. 568
- Klassifikation
-
Wirtschaft
Single Equation Models; Single Variables: Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions
Specific Distributions; Specific Statistics
Model Evaluation, Validation, and Selection
Personal Income, Wealth, and Their Distributions
- Thema
-
stable distributions
Pareto-Lévy distribution
income distributions
invariance principles
Generalized Beta distributions
Einkommensverteilung
Disparitätsmaß
Beta-Verteilung
Theorie
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Dagsvik, John K.
Jia, Zhiyang
Vatne, Bjørn H.
Zhu, Weizhen
- Ereignis
-
Veröffentlichung
- (wer)
-
Luxembourg Income Study (LIS)
- (wo)
-
Luxembourg
- (wann)
-
2011
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:45 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Dagsvik, John K.
- Jia, Zhiyang
- Vatne, Bjørn H.
- Zhu, Weizhen
- Luxembourg Income Study (LIS)
Entstanden
- 2011
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