Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/185885
Authors: 
Aebi, Robert
Neusser, Klaus
Steiner, Peter
Year of Publication: 
2008
Citation: 
[Journal:] Swiss Journal of Economics and Statistics [ISSN:] 2235-6282 [Volume:] 144 [Year:] 2008 [Issue:] 2 [Pages:] 117-151
Abstract: 
Based on a relative entropy approach, this paper proposes a method to estimate or update transition matrices using just cross-sectional observations at two points in time. The method is then applied to explain the development of the US income distribution. Starting from three hypothesized transition matrices and a transition matrix estimated from the PSID data, we show how these matrices must be adjusted in the light of the cross-sectional information. Finally, we explore the consequences of these updated transition matrices for the future development of the US income distribution.
Subjects: 
income distribution
income dynamics
relative entropy
JEL: 
D31
C51
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by/4.0/
Document Type: 
Article

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