  We propose an efficient estimation method for the income Pareto exponent when
only certain top income shares are observable. Our estimator is based on the
asymptotic theory of weighted sums of order statistics and the efficient
minimum distance estimator. Simulations show that our estimator has excellent
finite sample properties. We apply our estimation method to U.S. top income
share data and find that the Pareto exponent has been stable at around 1.5
since 1985, suggesting that the rise in inequality during the last three
decades is mainly driven by redistribution between the rich and poor, not among
the rich.
