2021/04/16 by Thomas Blanchet, Juliette Fournier, Thomas Piketty · 83 citations
Economics, Econometrics and Finance · Mathematics · Social Sciences · #Applied mathematics #Combinatorics #Computer science #Distribution (mathematics) #Econometrics #Economics #Extreme value theory #Fiscal Policy and Economic Growth #Gender, Labor, and Family Dynamics #Generalized Pareto distribution #Income, Poverty, and Inequality #Interpolation (computer graphics) #Mathematical analysis #Mathematical optimization #Mathematics #Pareto distribution #Pareto principle #Quantile #Rank (graph theory) #Statistics
paper · pdf · doi:10.1111/roiw.12510
published in Review of Income and Wealth 68(1), 263-288 (Wiley)
openalex publication_date 2021/04/16 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/15
We define generalized Pareto curves as the curve of inverted Pareto coefficients b ( p ), where b ( p ) is the ratio between average income above rank p and the p ‐th quantile Q ( p ) (i.e., ). We use them to characterize income distributions. We develop a method to flexibly recover a continuous distribution based on tabulated income data as is generally available from tax authorities, which produces smooth and realistic shapes of generalized Pareto curves. Using detailed tabulations from quasi‐exhaustive tax data, we show the precision of our method. It gives better results than the most commonly used interpolation techniques for the top half of the distribution.