Generalized Pareto Curves: Theory and Applications
Résumé
We define generalized Pareto curves as the curve of inverted Pareto coefficients b(p), where b(p) is the ratio between average income above rank p and the p-th quantile Q(p) (i.e., b(p)=E[X|X>Q(p)]/Q(p))). We use them to characterize income distributions. We develop a method to flexibly recover a continuous distribution based on tabulated income data as is generally available from tax authorities, which produces smooth and realistic shapes of generalized Pareto curves. Using detailed tabulations from quasi-exhaustive tax data, we show the precision of our method. It gives better results than the most commonly used interpolation techniques for the top half of the distribution.
Domaines
Economies et financesFormat du dépôt | Notice |
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Type de dépôt | Article dans une revue |
Titre |
en
Generalized Pareto Curves: Theory and Applications
|
Résumé |
en
We define generalized Pareto curves as the curve of inverted Pareto coefficients b(p), where b(p) is the ratio between average income above rank p and the p-th quantile Q(p) (i.e., b(p)=E[X|X>Q(p)]/Q(p))). We use them to characterize income distributions. We develop a method to flexibly recover a continuous distribution based on tabulated income data as is generally available from tax authorities, which produces smooth and realistic shapes of generalized Pareto curves. Using detailed tabulations from quasi-exhaustive tax data, we show the precision of our method. It gives better results than the most commonly used interpolation techniques for the top half of the distribution.
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Auteur(s) |
Thomas Blanchet
1, 2
, Juliette Fournier
3
, Thomas Piketty
1, 2
1
PSE -
Paris School of Economics
( 301309 )
- 48 boulevard Jourdan 75014 Paris
- France
2
PJSE -
Paris Jourdan Sciences Economiques
( 578027 )
- 48 boulevard Jourdan 75014 Paris
- France
3
MIT -
Massachusetts Institute of Technology
( 301950 )
- 77 Massachusetts Ave, Cambridge, MA 02139
- États-Unis
|
Licence |
Paternité - Pas d'utilisation commerciale - Pas de modification
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Public visé |
Scientifique
|
Langue du document |
Anglais
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Nom de la revue |
|
Vulgarisation |
Non
|
Comité de lecture |
Oui
|
Audience |
Internationale
|
Date de publication |
2022-03
|
Volume |
68
|
Numéro |
1
|
Page/Identifiant |
263-288
|
Mots-clés (JEL) |
|
Projet(s) ANR |
|
Domaine(s) |
|
Mots-clés |
en
Income, Inequality, Pareto, Power law, Interpolation
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DOI | 10.1111/roiw.12510 |
UT key WOS | 000640541700001 |
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