The concept of national income holds great importance in the current business scenario. Inequality in income distribution within a country has a major impact on the welfare of its citizens. To draw inferences and implications regarding inequality from national income data, the data has to be reliable. Judgments made from the data can get influenced by its underlying statistical properties. In this report, we tested the goodness of fit of the data for different statistical models and further the parameters are estimated under these income models. Finally, a comparison of different models was made. It was found that the Weibull model fairly fits the per-capita income data, as compared to other models.The concept of national income holds great importance in the current business scenario. Inequality in income distribution within a country has a major impact on the welfare of its citizens. To draw inferences and implications regarding inequality from national income data, the data has to be reliable. Judgments made from the data can get influenced by its underlying statistical properties. In this report, we tested the goodness of fit of the data for different statistical models and further the parameters are estimated under these income models. Finally, a comparison of different models was made. It was found that the Weibull model fairly fits the per-capita income data, as compared to other models.
Since there are no substantial changes occurred in the income ratio over the said period of time, the inequality remains at around a particular level. Thus, policy makers should keep in mind that the inequality levels in India have not changed over four decades.