Copula Density Estimation of Iranian Household Income and Expenditure by Using Selection Method

Recently by using contamination families, a new way of modeling dependence has been introduced. In this method, a sequence of parametric copulas is considered and in a few numbers of steps, accurate approximations for copula densities are obtained. By using the selection model method, the model complexity and number of model parameters are balanced. In this paper, two main variables in Iranian Household Income and Expenditure survey are considered and a copula density for those variables is estimated by using contamination family and selection model method.