A flexible descriptive model for the size distribution of incomes

Masato Okamoto ()

Economics Bulletin, 2014, vol. 34, issue 3, 1600-1610

Abstract: There are four-parameter income distribution models that have good reputation for goodness-of-fit. In contrast, the existing models with five or more parameters fail to achieve a satisfactory level of goodness-of-fit. We propose a new seven-parameter model that is empirically shown to be substantially better fitted than the existing models by imposing an appropriate restriction on the parameter domain prior to the maximum likelihood estimation.

Keywords: income distribution; Lorenz curve; mixture distribution; model selection (search for similar items in EconPapers)
JEL-codes: C4 D6 (search for similar items in EconPapers)
Date: 2014-07-25
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