Politická ekonomie
Politická ekonomie
Prague Economic Papers
University of Economics, Prague

Prague Economic Papers Vol. 23 No. 3

A Study of Income Stability in the Czech Republic by Finite Mixtures

DOI: https://doi.org/10.18267/j.pep.487

[full text (PDF)]

Jitka Bartošová, Nicholas T. Longford

Income, expenditure and similar variables in monetary units tend to have distributions similar to log-normal. Description of such variables after logarithmic transformation by the normal model is often not accurate enough, especially for multivariate data. Deviations of their empirical distributions from the theoretical lognormal distribution often require more sophisticated analysis. Mixtures represent a very fl exible way of reconstructing complex distributions with irregular features and are suitable for detailed modelling. Multivariate mixture models are applied to the Czech longitudinal survey of household income in the European Union Statistics on Income and Living Conditions (EU-SILC) in 2005–2008. The analysis identifi es distinct patterns of progression of income, with a high percentage of households having steady annual increases over the four years (three transitions). Graphical presentation of the results is emphasised.

Keywords: Equivalised household income, EU-SILC, income distribution, longitudinal analysis, multivariate mixtures, stability

JEL Classification: C33, C38, H31

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