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On the Estimation of the Global Income Distribution Using a Parsimonious Approach

In: Economic Well-Being and Inequality: Papers from the Fifth ECINEQ Meeting

Author

Listed:
  • Vanesa Jordá
  • José María Sarabia
  • Faustino Prieto

Abstract

This paper aims to estimate the global income distribution during the nineties using limited information. In a first stage, we obtain national income distributions considering a model with two parameters. In particular, we propose to use the so-calledLamé distributions, which are curved versions of the Sigh-Maddala and Dagum distributions. The main feature of this family is that they represent parsimonious models which can fit income data adequately with just two parameters and whose Lorenz curves are characterized by only one parameter. In a second stage, global and regional distributions are derived from a finite mixture of these families using population shares. We test the validity of the model, comparing it with other two-parameter families. Our estimates of different inequality measures suggest that global inequality presents a decreasing pattern mainly driven by the fall of the differences across countries during the course of the study period that offsets the increase in disparities within countries.

Suggested Citation

  • Vanesa Jordá & José María Sarabia & Faustino Prieto, 2014. "On the Estimation of the Global Income Distribution Using a Parsimonious Approach," Research on Economic Inequality, in: Economic Well-Being and Inequality: Papers from the Fifth ECINEQ Meeting, volume 22, pages 115-145, Emerald Group Publishing Limited.
    • Handle: RePEc:eme:reinzz:s1049-258520140000022003
    DOI: 10.1108/S1049-258520140000022003
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    Citations

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    Cited by:

    1. Vanesa Jorda & José María Sarabia & Markus Jäntti, 2021. "Inequality measurement with grouped data: Parametric and non‐parametric methods," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 184(3), pages 964-984, July.
    2. Vanesa Jorda & Jos Mar a Sarabia & Markus J ntti, 2020. "Estimation of Income Inequality from Grouped Data," LIS Working papers 804, LIS Cross-National Data Center in Luxembourg.
    3. Jordá, Vanesa & Niño-Zarazúa, Miguel, 2019. "Global inequality: How large is the effect of top incomes?," World Development, Elsevier, vol. 123(C), pages 1-1.
    4. Jordá, Vanesa & Alonso, José M., 2017. "New Estimates on Educational Attainment Using a Continuous Approach (1970–2010)," World Development, Elsevier, vol. 90(C), pages 281-293.

    More about this item

    Keywords

    Limited information; Singh-Maddala and Dagum distributions; Gini index; national income distribution; regional income distribution; C13; C18; D31;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C18 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Methodolical Issues: General
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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