Extended Slash Modified Lindley Distribution to Model Economic Variables Showing Asymmetry

Jiju Gillariose, Joshin Joseph () and Christophe Chesneau
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Jiju Gillariose: CHRIST (Deemed to be University)
Joshin Joseph: SCAPS, Marian College Kuttikkanam
Christophe Chesneau: University of Caen

Computational Economics, 2025, vol. 66, issue 4, No 26, 3497-3516

Abstract: Abstract This article introduces a novel probability distribution to model economic variables with high kurtosis and heavy tails showing a decreasing trend. From a mathematical viewpoint, it corresponds to the distribution of the ratio of two independent random variables, one with the modified Lindley distribution and another with the beta distribution. In some sense, it can be described as an extended three-parameter version of the Lindley distribution that has the ability to model data with high kurtosis. After presenting this distribution in more in-depth details, a comprehensive analysis is given, including its associated functions, moments, skewness, and kurtosis characteristics. Furthermore, a parametric estimation work is carried out. A simulation approach is used to validate the performance of the obtained estimates. The applicability of the proposed distribution is demonstrated by fitting real-world data into various socioeconomic scenarios.

Keywords: Data fitting; Income data; Slash Lindley distribution; Maximum likelihood estimation; Lindley distribution (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10614-024-10799-8

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