Confidence Interval for Quantile Ratio of the Dagum Distribution

TL;DR

This paper develops a method to construct confidence intervals for quantile ratio-based inequality measures within the Dagum distribution, validated through simulations and applied to Polish income data from 2015.

Contribution

It introduces a new approach for confidence interval estimation of income inequality measures assuming the Dagum distribution, with validation via simulations and real data application.

Findings

Confidence intervals perform well in simulations.

Application to Polish income data illustrates practical utility.

Method enhances analysis of income inequality measures.

Abstract

In economic research inequality measures based on ratios of quantiles are frequently applied to the analysis of income distributions. In the paper, we construct a confidence interval for such measures under the Dagum distribution which has been widely assumed as a~model for income distributions in empirical analyses Its properties are investigated on the basis of computer simulations. The constructed confidence interval is applied to the analysis of inequality income in Poland in 2015.