A New Model of Income Distribution: The K-Generalized Distribution
20 Pages Posted: 20 Oct 2008 Last revised: 10 Jan 2012
Date Written: June 6, 2011
This paper proposes a three-parameter statistical model of income distribution using the maximum entropy principle based on a generalized entropic measure suggested by Kaniadakis (2001, 2002, 2005). Formulas for the shape, moments and standard tools for inequality measurement are given. The model is shown to fit remarkably well the personal income data for Great Britain, Germany and the United States in different years, and its empirical performance appears to be competitive with that of other existing distributions.
Keywords: C16, D31
JEL Classification: Income distribution, income inequality, k-generalized distribution
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