Title : Kakwani's and Podder's (1973, 76) and Ortega's (1991) Functional Forms are Very Restrictive for Describing Lorenz Curves

Authors : Md. Sharif Hossain

Abstract : The Lorenz curve is a most powerful tool in the analysis of the size distribution of income and wealth. In the past decades, many authors have proposed different functional forms for estimating Lorenz curves from grouped data. Among them the most familiar are Kakwani's and Podder's (1973, 76) functional forms. In recent, another functional form is proposed by Ortega ( Ortega, G Martin, A. Fernandez M Ladoux and A. Garcia, 1991). In this paper an attempt has been made to show that these functional forms are very restrictive for describing Lorenz curves and lead to an upward bias of estimating inequalities. To show this, in this paper we developed a new general functional form. From this general functional form at the first stage we have specified several descriptive parametric approximations and then on the basis of the goodness of fit, F-tests of nested forms, estimated residual sum of squares and the measurement of the Gini coefficients, we compared among these alternative forms. Empirical verification of the theoretical construct has been done based on the data set from BBS (Bangladesh Bureau of Statistics) publications, "Household Expenditure Surveyā€¯ corresponding to different years.

Journal : Kyushu Association of Economic Science Journal, Japan Volume : 41 Year : 2003 Issue : 1
Pages : 105-114 City : Edition : Editors :
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