Suppose that the distribution of earnings of members of a population is Pareto with parameters a
Question:
Suppose that the distribution of earnings of members of a population is Pareto with parameters λ a > 0, where
a. Show that the top 20 percent of earners earn 80 percent of the total earnings.
b. Show that the 20 top percent of the top 20 percent of earners earn 80 percent of the earnings of the top 20 percent of earners. (That is, show that the top percent of all earners earn 80 percent of the total earnings of the top 20 percent of all earners.)
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a To show that the top 20 percent of earners earn 80 percent of the tot...View the full answer
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