Modelling Income Distribution

This book collects recent research on modelling income distribution and redistribution by John Creedy and a number of other eminent co-authors. The book opens with the main results of a research programme, largely with Vance Martin, on distributional modelling using the generalised exponential family. The authors argue that the major advantages of this family are its flexibility, particularly in handling multimodality, and the explicit link with structural demand and supply models. The book goes on to discuss the research, undertaken with Alex Bakker, on the effects of macroeconomic variables, particularly unemployment and inflation, on the personal distribution. The use of the generalised exponential family in this context is explored, as well as the use of mixture distributions. Finally, income redistribution is examined in depth. This includes work, mainly with Justin van de Ven, on decomposing the redistributive effects of taxes into vertical, horizontal and reranking effects. The final chapters, with Duangkamon Chotikapanich, explore the Bayesian estimation of a range of social welfare, inequality and tax progressivity measures. Posterior distributions of the measures are obtained. Modelling Income Distribution should be of interest to a wide range of academics and researchers with an interest in welfare economics and econometric theory.