Open access

Modelling Lorenz Curves: Robust and Semi-Parametric Issues

MandatorDistributional Analysis Research Programme
Number of pages18
PublisherLondon : Distributional Analysis Research Programme
  • DARP discussion Paper; 91
Publication date2007

Modelling Lorenz curves (LC) for stochastic dominance comparisons is central to the analysis of income distribution. It is conventional to use non-parametric statistics based on empirical income cumulants which are in the construction of LC and other related second-order dominance criteria. However, although attractive because of its simplicity and its apparent flexibility, this approach suffers from important drawbacks. While no assumptions need to be made regarding the data-generating process (income distribution model), the empirical LC can be very sensitive to data particularities, especially in the upper tail of the distribution. This robustness problem can lead in practice to 'wrong' interpretation of dominance orders. A possible remedy for this problem is the use of parametric or semi-parametric models for the datagenerating process and robust estimators to obtain parameter estimates. In this paper, we focus on the robust estimation of semi parametric LC and investigate issues such as sensitivity of LC estimators to data contamination (Cowell and Victoria-Feser 2002), trimmed LC (Cowell and Victoria-Feser 2006) and inference for trimmed LC (Cowell and Victoria-Feser 2003), robust semi-parametric estimation for LC (Cowell and Victoria-Feser 2007) selection of optimal thresholds for (robust) semi parametric modelling (Dupuis and Victoria-Feser 2006) and use both simulations and real data to illustrate these points.

Citation (ISO format)
COWELL, Frank, VICTORIA-FESER, Maria-Pia. Modelling Lorenz Curves: Robust and Semi-Parametric Issues. 2007
Main files (1)
  • PID : unige:6630

Technical informations

Creation05/07/2010 12:15:00 PM
First validation05/07/2010 12:15:00 PM
Update time03/14/2023 3:29:08 PM
Status update03/14/2023 3:29:08 PM
Last indexation10/18/2023 8:59:20 AM
All rights reserved by Archive ouverte UNIGE and the University of GenevaunigeBlack