Discussion Papers no. 246

Is the distribution of income compatible with s stable distribution?

Mandelbrot (1961) proposed to apply the class of Pareto-Levy distributions - which belong to the Stable distributions - as a framework for modelling income distributions. He also presented theoretic arguments in favor of the Pareto-Levy distributions. In this paper we provide additional theoretical justification for this class of distributions. We also use micro data on individual market income to estimate the parameters of a Pareto-Levy distribution. Several estimation methods have been applied. The estimated Pareto-Levy distribution appears to fit the data well.

Om publikasjonen

Tittel

Is the distribution of income compatible with s stable distribution?

Ansvarlige

John K. Dagsvik, Bjørn Helge Vatne

Serie og -nummer

Discussion Papers no. 246

Utgiver

Statistics Norway, Research Department

Emne

Discussion Papers

Antall sider

28

Målform

Engelsk

Om Discussion Papers

Discussion papers comprise research papers intended for international journals and books. A preprint of a Discussion Paper may be longer and more elaborate than a standard journal article as it may include intermediate calculations, background material etc.

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