On a Finite Mixture of Pareto Distributions

Abstract

Finite mixtures of probability distributions arise as models of income and wealth in many practical problems. In the present paper, we study the properties of finite mixture of Pareto distributions in the context of income analysis. We develop estimation of the parameters of the finite mixture of Pareto distributions using different methods for complete as well as censored samples. A simulation study and a data analysis are carried out to assess the performance of the estimators.