SFB 303 Discussion Paper No. A - 219

Author: Henninger, Christoph, and Heinz-Peter Schmitz
Title: Size Distributions of Incomes and Expenditures: Testing the Parametric Approach
Abstract: It is common in economics to describe the size distribution of income by a parametric function. We will fit some of the most frequently used functional forms (Gamma, Generalized Gamma, Singh-Maddala, Lognormal and Fisk) to the income data made available by the ESRC Data Archive at the University of Essex. Using the Kolmogorov-Smirnov test, the data reject all functional forms applied to the whole population. Stratifying the data into subgroups using the criteria of household composition or the main source of income reveals differences in the flexibilities of the parametric forms to represent the data.
Creation-Date: February 1989
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