Models for Income based on Bivariate Pareto Distributions
Saralees Nadarajah, Samuel Kotz
Abstract
Saralees Nadarajah, Samuel Kotz
Abstract
It is shown that the total amount of income earned during a reference period can be expressed as the products of components of bivariate Pareto distributions. The exact distribution of the total amount of income P = XY and the corresponding moment properties are derived when (X, Y ) follows three of the most commonly known bivariate Pareto distributions. The expressions turn out to involve special functions.
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It is shown that the total amount of income earned during a reference period can be expressed as the products of components of bivariate Pareto distributions. The exact distribution of the total amount of income P = XY and the corresponding moment properties are derived when (X, Y ) follows three of the most commonly known bivariate Pareto distributions. The expressions turn out to involve special functions.
Key concepts: Bivariate analysis, Pareto principle, Pareto distribution, Econometrics, Lomax distribution, Economics, Moment (physics), Pareto interpolation