Demographic Transition and the Dynamics of Income Distribution in Japan: A Bayesian State-Space Approach (opens in new tab)

We develop a Bayesian state-space model for analyzing the dynamic evolution of income distributions using grouped income data. The model combines the generalized beta distribution of the second kind (GB2) with latent time-varying parameters to capture changes in the entire income distribution over time. Using Japanese household income data, we examine how demographic factors, particularly population aging and declining household size, affect ine...