Three-Part Composite Pareto Modelling for Income Distribution in Malaysia

Income distribution models can be useful for describing the economic properties of a population. In this study, three-part composite Pareto are fitted to income in Malaysia years 2007, 2009, 2012, 2014, and 2016. The divide population into three parts, each following different model. lower part follows inverse distribution, upper middle another unspecified For application data, use Gaussian mixture is proposed part, making Pareto–Gaussian mixture-Pareto model semi-parametric. From model, it found that levels inequality groups decrease over period study. Additionally, proportion data highly correlated with official absolute poverty incidence.