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Income Thresholds and Income Classes

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This paper proposes a method for detecting income classes based on the change-point problem. There is an increasing demand for such a method in the literature. Computation of polarization indices requires a pre-grouping of the incomes. Similarly, indices of social exclusion and sometimes indices of income inequality require detection of thresholds. The estimation procedure is implemented using a bootstrap technique. Finally, an application of the method to EU member states and to the United States is also considered.

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Conchita D'Ambrosio, Pietro Muliere, Piercesare Secchi

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Adapt according to the presented license agreement and reference the original author.