Explicit probability density functions of income
Chapter 2 concentrated on defining a set of inequality measures which used only the general notion of a discrete or continuous random variable (r.v.) without explicitly specifying its associated probability density function (p.d.f.). In this chapter the p.d.f. will be further specified. We shall assume that the r.v. is continuous and has values on the interval (0, ∞) (for convenience). We shall attempt to formulate a priori p.d.f.s which well describe the observed frequency curve of income. This search for theoretical functions resembling the observed distribution of incomes can be justified from several points of view.
KeywordsLognormal Distribution Income Distribution Transformation Function Lorenz Curve Inequality Measure
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