Journal of Statistical and Econometric Methods

Modelling Lorenz curve

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• Abstract

  There has been a large number of studies in which the scientists have built models for income distributions. As an alternative, some have built models for Lorenz curves. The step from Lorenz curve to distribution function is more difficult than the step from distribution function to Lorenz curve. There is a difference between advanced and simple Lorenz models. Advanced models with several parameters yield a better fit to data, but are difficult to connect to exact income distributions. Simple one-parameter models can more easily be associated with the corresponding income distribution, but when statistical analyses are performed the goodness of fit is often poor. In this study, simple models are considered and the results compared with results obtained by numerical methods without any assumptions concerning the Lorenz model.