A Comparison of Parametric Models of Income Distribution Across Countries and Over Time

Luxembourg Income Study Working Paper No. 305

47 Pages Posted: 31 Aug 2002

See all articles by Ripsy Bandourian

Ripsy Bandourian

Harvard University - Business School (HBS)

James McDonald

Brigham Young University

Robert S. Turley

Quantitative Strategies

Date Written: June 2002

Abstract

The five-parameter generalized beta distribution and ten of its special cases are considered as models fore the size distribution of income. The models are fit to income data for 23 countries and various years - a total of 82 datasets. Of the models considered, the Weibull, Daagum and generalized beta of the second kind are best fitting of the models with two, three and four parameters for 62 percent, 84 percent, and 96 percent of the data sets, respectively. Increasing inequality with respect to pre-tax income is observed in most of the countries considered.

Suggested Citation

Bandourian, Ripsy and McDonald, James B. and Turley, Robert S., A Comparison of Parametric Models of Income Distribution Across Countries and Over Time (June 2002). Luxembourg Income Study Working Paper No. 305, Available at SSRN: https://ssrn.com/abstract=324900 or http://dx.doi.org/10.2139/ssrn.324900

Ripsy Bandourian

Harvard University - Business School (HBS) ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

James B. McDonald

Brigham Young University ( email )

130 Faculty Office Bldg.
Provo, UT 84602-2363
United States
801-378-3463 (Phone)

Robert S. Turley (Contact Author)

Quantitative Strategies ( email )

32 Old Slip, 24th Floor
New York, NY 10005
United States

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