Inter-country empirical analysis of a robust Lorenz distribution of income

Abstract

An alternative to the traditional approach, this study designs some new approximations of Lorenz distribution of income by specifying functional forms of the Lorenz curve directly and then to estimate the parameters of these hypothetical specifications under the general linear hypothesis. An attempt is also made to find the properties of these new approximations of Lorenz distribution of income. The empirical application is conducted to household income data for the thirty-seven countries, along with Australia, Taiwan, and United States. The results suggest that the selection of just one robust Lorenz distribution of income is difficult. One model is a better fit to the household income data from some countries or years according to the estimation results and test outcome probabilities and not to others.