Journal article

Pareto Models, Top Incomes and Recent Trends in UK Income Inequality

SP Jenkins

Economica | WILEY | Published : 2016


I determine UK income inequality levels and trends by combining inequality estimates from tax return data (for the ‘rich’) and household survey data (for the ‘non-rich’), taking advantage of the better coverage of top incomes in tax return data (which I demonstrate) and creating income variables in the survey data with the same definitions as in the tax data to enhance comparability. For top income recipients, I estimate inequality and mean income by fitting Pareto models to the tax data, examining specification issues in depth, notably whether to use Pareto I or Pareto II (generalised Pareto) models, and the choice of income threshold above which the Pareto models apply. The preferred speci..

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Awarded by Australian Research Council

Awarded by Economic and Social Research Council

Funding Acknowledgements

My research is partly supported by an Australian Research Council Discovery Grant (award DP150102409, with Richard Burkhauser, Nicolas Herault and Roger Wilkins) and core funding of the Research Centre on Micro-Social Change at the Institute for Social and Economic Research by the University of Essex and the UK Economic and Social Research Council (award ES/L009153/1).