Models for Income based on Bivariate Pareto Distributions

  • Saralees Nadarajah
  • Samuel Kotz

Abstract

It is shown that the total amount of income earned during a reference period can be expressed as the products of components of bivariate Pareto distributions. The exact distribution of the total amount of income P = XY and the corresponding moment properties are derived when (X, Y ) follows three of the most commonly known bivariate Pareto distributions. The expressions turn out to involve special functions.
Published
2006-12-15