Three-Part Model of Distribution of Household Incomes |
| P. Łukasiewicz, K. Karpio, A.J. Orłowski
Institute of Information Technology, WULS-SGGW, Nowoursynowska 159, 02-776 Warsaw, Poland |
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| Previous studies of Polish household budgets usually assumed two-part distributions of the incomes. Low and medium incomes have been approximated by a log-normal distribution. On the other hand high incomes have been described by the Pareto Type I model. In this paper we analyze cumulative distribution of Polish household incomes. We observe significant deviations from the log-normal model describing the lowest incomes. We propose a model which better describes the left end of the income distribution. Eventually we construct a distribution consisting of the three parts, which seems to be well suited to correctly describe the whole range of the incomes. We also investigate non-positive incomes and the relation between them and expenditures. |
DOI:10.12693/APhysPolA.138.96 topics: tails of income distribution, power law, log-normal model |