The k-generalized distribution: A new descriptive model for the size distribution of incomes

TL;DR

This paper introduces the k-generalized distribution as a flexible model for income distribution, providing formulas for inequality measures and demonstrating excellent fit to Australian and US income data.

Contribution

It presents a new distribution model with methods for parameter estimation and applies it successfully to real-world income data.

Findings

The k-generalized distribution fits income data well in Australia and the US.

Provides explicit formulas for inequality measures like the Gini coefficient.

Introduces a parameter estimation method for the new distribution.

Abstract

This paper proposes the k-generalized distribution as a model for describing the distribution and dispersion of income within a population. Formulas for the shape, moments and standard tools for inequality measurement - such as the Lorenz curve and the Gini coefficient - are given. A method for parameter estimation is also discussed. The model is shown to fit extremely well the data on personal income distribution in Australia and the United States.