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Parametric estimation of income distributions using grouped data: an Approximate Bayesian Computation approach
[Working Papers / Documents de travail]

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  • Mathias Silva

    (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

Abstract

Recent empirical analysis of income distributions are often limited by the exclusive availability of data in a grouped format. This data format is made particularly restrictive by a lack of information on the underlying grouping mechanism and sampling variability of the grouped-data statistics it contains. These restrictions often result in the unavailability of an analytical parametric likelihood function exploiting all information available in the grouped data. Building on recent methods for inference on parametric income distributions for this type of data, this paper explores a new Approximate Bayesian Computation (ABC) approach. ABC overcomes the restrictions posed by grouped data for Bayesian inference through a non-parametric approximation of the likelihood function exploiting simulated data from the income distribution model. Empirical applications of the proposed ABC method in both simulated and World Bank's PovCalNet data illustrate the performance and suitability of the method for the typical formats of grouped data on incomes.

Suggested Citation

  • Mathias Silva, 2023. "Parametric estimation of income distributions using grouped data: an Approximate Bayesian Computation approach [Working Papers / Documents de travail]," Working Papers hal-04066544, HAL.
    • Handle: RePEc:hal:wpaper:hal-04066544
    Note: View the original document on HAL open archive server: https://amu.hal.science/hal-04066544
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    References listed on IDEAS

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    1. Mathias Silva, 2023. "Parametric models of income distributions integrating misreporting and non-response mechanisms," Working Papers hal-04093646, HAL.

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    More about this item

    Keywords

    Grouped data; Bayesian inference; Generalized Lorenz curve; GB2; Grouped data Bayesian inference Generalized Lorenz curve GB2 C11 C18 C63; GB2 C11; C18; C63;
    All these keywords.

    JEL classification:

    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • C18 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Methodolical Issues: General
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques

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