A Composite Half-Normal-Pareto Distribution with Applications to Income and Expenditure Data
A Composite Half-Normal-Pareto Distribution with Applications to Income and Expenditure Data
Authors
Olmos, Neveka M.
Gomez Deniz, Emilio
Venegas, Osvaldo
Gomez, Hector W.
Gomez Deniz, Emilio
Venegas, Osvaldo
Gomez, Hector W.
Authors
Date
Datos de publicaciĆ³n:
10.3390/math12111631
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Abstract
The half-normal distribution is composited with the Pareto model to obtain a uni-parametric distribution with a heavy right tail, called the composite half-normal-Pareto distribution. This new distribution is useful for modeling positive data with atypical observations. We study the properties and the behavior of the right tail of this new distribution. We estimate the parameter using a method based on percentiles and the maximum likelihood method and assess the performance of the maximum likelihood estimator using Monte Carlo. We report three applications, one with simulated data and the others with income and expenditure data, in which the new distribution presents better performance than the Pareto distribution.