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The Power-law Tail Exponent of Income Distributions

F. Clementi, T. Di Matteo, M. Gallegati

physics.soc-pharXiv:physics/0603061

Abstract

In this paper we tackle the problem of estimating the power-law tail exponent of income distributions by using the Hill's estimator. A subsample semi-parametric bootstrap procedure minimising the mean squared error is used to choose the power-law cutoff value optimally. This technique is applied to personal income data for Australia and Italy.

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