Pareto interpolation
Pareto interpolation is a nonlinear method of
interpolation to find the
median of a set of data. It is used in
economics when analysing income figures. It assumes that the data fits a curve known as the
Pareto distribution.
The median is given by
where parameters κ and θ are given by:
and
where
- a = lower limit of the category containing the median
- b = upper limit of the category containing the median
- Pa = proportion of the distribution that lies below the lower limit
- Pb = proportion of the distribution that lies below the upper limit