Segregating RE into VE, HE, and RR – as suggested by Urban and Lambert (2008)
– necessitates the estimation of a set of concentration coefficients for post-payment income distribution, Cy, each corresponds to a particular ordering of income units as per groups of close-income equals,˝w k (k taking the values form 1 toK, withKbeing the number
of groups as determined by the income bandwidth,w, and the maximum income in the sample).