Title : Estimation of a Appropriate Function for the Household Income Distribution of Bangladesh and Income Inequalities


Authors : Md. Sharif Hossain

Abstract : Many distributions have been developed as descriptive models for the size distribution of income. In this paper, at the first stage, we considered the two parameters models, like Lognormal and Gamma families and at the second stage we considered the three and four parameters models like Log-t, Generalized Gamma, Singh-Maddala and Generalized Beta distributions as descriptive models for the size distribution of household income in Bangladesh. All of these considered functions do not fit the real data very well for the size distribution of household income in Bangladesh. That is why, the principle purpose of this paper is to select the appropriate distribution that fits the size distribution of household income in Bangladesh very well. And another attempt has been made to calculate some important measures of income inequality on the basis of the appropriate distribution. For the purpose of comparing the distributions, we used a non-linear maximization technique and adopted the parameters value, probabilities, sum of squared errors criteria, sum of absolute errors criteria and the chi-square value of the different distributions. On the basis of these criteria the relative performance of the different distributions is compared. An empirical application, including a comparison the considered distributions to demonstrate the better fit is made to household income data in Bangladesh for the years, 1995-96, 1991-92, 1988-89 and 1985-86. In our collected data, measurement errors arise from approximation and rounding off. That is why, on the baisis of the selected distribution we calculated some inequality measures, like, Relative Mean Deviation, Variance, Coefficient of Variation, Lorenz Curve and Gini Coefficients for the years, 1995-96, 1991-92, 1988-89 and 1985-86. Finally for the empirical analysis the set of data has been collected from BBS ( Bangladesh Bureau of Statistics) publications like Household Expenditure Survey


Journal : The Keizai Ronkyu, The Graduate School of Economics, Kyushu University, Japan Volume : 106 Year : 2000 Issue : 1
Pages : 113-132 City : Edition : Editors :
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