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
