Income Thresholds and Income Classes

Conchita D'Ambrosio, Pietro Muliere and Piercesare Secchi

No 325, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: This paper proposes a method for detecting income classes based on the change-point problem. There is an increasing demand for such a method in the literature. Computation of polarization indices requires a pre-grouping of the incomes. Similarly, indices of social exclusion and sometimes indices of income inequality require detection of thresholds. The estimation procedure is implemented using a bootstrap technique. Finally, an application of the method to EU member states and to the United States is also considered.

Keywords: income distribution; change-point; thresholds. (search for similar items in EconPapers)
JEL-codes: D31 (search for similar items in EconPapers)
Pages: 15 p.
Date: 2003
New Economics Papers: this item is included in nep-lab
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Citations: View citations in EconPapers (1)

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