A robust semi-parametric approach for measuring income inequality in Malaysia

Muhammad Aslam Mohd Safari, Nurulkamal Masseran, Kamarulzaman Ibrahim

Research output: Contribution to journalArticle

3 Citations (Scopus)

Abstract

In this study, a robust semi-parametric approach which involves combining the empirical distribution and Pareto model is applied for measuring the income distribution in Malaysia based on the survey data of household incomes for the years of 2007, 2009, 2012 and 2014. From our analysis, it is found that the Pareto model is well fitted to the top household incomes for all years considered, suggesting that this model is a suitable parametric distribution to describe the top household incomes in Malaysia. Based on the semi-parametric Gini, generalized entropy and Atkinson indices, it is found that the income inequality shows a decreasing trend over the period, indicating an improvement of income distribution in Malaysia. Moreover, the fitted semi-parametric Lorenz curves show that the economic pie of the high income group reduced slightly after being taken up by the low income group while there is no clear change for the middle household income group.

Original languageEnglish
Pages (from-to)1-13
Number of pages13
JournalPhysica A: Statistical Mechanics and its Applications
Volume512
DOIs
Publication statusPublished - 15 Dec 2018

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income
Malaysia
Income Distribution
Pareto
Lorenz Curve
Parametric Curves
Generalized Entropy
Empirical Distribution
Survey Data
Model
Economics
economics
entropy
trends

Keywords

  • Income distribution
  • Pareto distribution
  • Power-law
  • Probability integral transform statistics
  • Semi-parametric model
  • Survey samples

ASJC Scopus subject areas

  • Statistics and Probability
  • Condensed Matter Physics

Cite this

A robust semi-parametric approach for measuring income inequality in Malaysia. / Safari, Muhammad Aslam Mohd; Masseran, Nurulkamal; Ibrahim, Kamarulzaman.

In: Physica A: Statistical Mechanics and its Applications, Vol. 512, 15.12.2018, p. 1-13.

Research output: Contribution to journalArticle

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