Measuring the inequality of Malaysian top incomes using a new Pareto-type distribution in rural and urban regions
Document Type
Conference Item
Publication Date
1-1-2024
Abstract
Income inequality had been one of the most important indicators of a country's economic success. In order to achieve the objective of becoming a high-income nation, the income inequality had to be addressed by reducing the rural-urban gap as an effort to eradicate the poverty. This study analyzes the income inequality among Malaysian top earners in rural and urban regions using household income data from 2009-2019 based on the new Pareto-type distribution. The shape parameter of the model is estimated using the maximum likelihood estimator method and its scale parameter is determined using the fixed proportion technique. Then, the income inequality measures such as the Lorenz curve, Gini index, and Theil index are derived from the new Pareto model to examine the level of disparity over the years. The analysis shows that the new Pareto model explains well for the data in the top 20-30 and top 30-35 of rural and urban household incomes respectively. Besides, the difference in income inequality's trends between the rural and urban region requires a new economic strategy with a more specific target in mind to reduce the inequality in both regions. © 2024 Author(s).
Keywords
Income inequality, Malaysia, distribution, rural, urban
Divisions
MathematicalSciences
Publication Title
AIP Conference Proceedings
Volume
2905
Issue
1
Publisher
American Institute of Physics Inc.
Event Title
29th National Symposium on Mathematical Sciences (SKSM 2022)
Event Location
Virtual, Online
Event Dates
7-8 September 2022
Event Type
conference
Additional Information
Cited by: 0; Conference name: 29th National Symposium on Mathematical Sciences, SKSM 2022; Conference date: 7 September 2022 through 8 September 2022; Conference code: 196194; All Open Access, Bronze Open Access