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Welfare Comparisons: Sequential Procedures for Heterogeneous Populations

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Lambert, Peter J
Ramos, Xavier

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Abstract

Some analysts use sequential dominance criteria, and others use equivalence scales in combination with non-sequential dominance tests, to make welfare comparisons of joint distributions of income and needs. In this paper we present a new sequential procedure which copes with situations in which sequential dominance fails. We also demonstrate that the recommendations deriving from the sequential approach are valid for distributions of equivalent income whatever equivalence scale the analyst might adopt. Thus, the paper marries together the sequential and equivalizing approaches, seen as alternatives in much previous literature. All results are specified in forms that allow for demographic differences in the populations being compared. Copyright 2002 by The London School of Economics and Political Science

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Article provided by London School of Economics and Political Science in its journal Economica.

Volume (Year): 69 (2002)
Issue (Month): 276 (November)
Pages: 549-62
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Handle: RePEc:bla:econom:v:69:y:2002:i:276:p:549-62

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Banks, James & Johnson, Paul, 1994. "Equivalence Scale Relativities Revisited," Economic Journal, Royal Economic Society, vol. 104(425), pages 883-90, July. [Downloadable!] (restricted)
  2. Whitmore, G A, 1970. "Third-Degree Stochastic Dominance," American Economic Review, American Economic Association, vol. 60(3), pages 457-59, June. [Downloadable!] (restricted)
  3. Coulter, Fiona A E & Cowell, Frank A & Jenkins, Stephen P, 1992. "Differences in Needs and Assessment of Income Distributions," Bulletin of Economic Research, Blackwell Publishing, vol. 44(2), pages 77-124, April.
  4. Udo Ebert & Patrick Moyes, 2000. "Adjusting Incomes for Needs: Can One Avoid Equivalence Scales?," Econometric Society World Congress 2000 Contributed Papers 0917, Econometric Society. [Downloadable!]
  5. Bishop, John A. & Formby, John P. & Thistle, Paul D., 1991. "Rank dominance and international comparisons of income distributions," European Economic Review, Elsevier, vol. 35(7), pages 1399-1409, October. [Downloadable!] (restricted)
  6. Chambaz, Christine & Maurin, Eric, 1998. "Atkinson and Bourguignon's Dominance Criteria: Extended and Applied to the Measurement of Poverty in France," Review of Income and Wealth, Blackwell Publishing, vol. 44(4), pages 497-513, December.
  7. Ebert, Udo, 1995. "Income inequality and differences in household size," Mathematical Social Sciences, Elsevier, vol. 30(1), pages 37-55, August. [Downloadable!] (restricted)
  8. Kolm, Serge-Christophe, 1976. "Unequal inequalities. I," Journal of Economic Theory, Elsevier, vol. 12(3), pages 416-442, June. [Downloadable!] (restricted)
  9. Fleurbaey, M. & Hagnere, C. & Trannoy, A., 1998. "Welfare Comparisons with Bounded Equivalence Scales," Papers 9823, Paris X - Nanterre, U.F.R. de Sc. Ec. Gest. Maths Infor..
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  10. Udo Ebert, 1999. "Using equivalent income of equivalent adults to rank income distributions," Social Choice and Welfare, Springer, vol. 16(2), pages 233-258. [Downloadable!] (restricted)
  11. Bourguignon, Francois, 1989. "Family size and social utility : Income distribution dominance criteria," Journal of Econometrics, Elsevier, vol. 42(1), pages 67-80, September. [Downloadable!] (restricted)
  12. Fisher, Franklin M, 1987. "Household Equivalence Scales and Interpersonal Comparisons," Review of Economic Studies, Blackwell Publishing, vol. 54(3), pages 519-24, July. [Downloadable!] (restricted)
  13. Shorrocks, Anthony F & Foster, James E, 1987. "Transfer Sensitive Inequality Measures," Review of Economic Studies, Blackwell Publishing, vol. 54(3), pages 485-97, July. [Downloadable!] (restricted)
  14. Ebert, Udo, 2000. "Sequential Generalized Lorenz Dominance and Transfer Principles," Bulletin of Economic Research, Blackwell Publishing, vol. 52(2), pages 113-22, April.
  15. Jenkins, Stephen P & Lambert, Peter J, 1993. "Ranking Income Distributions When Needs Differ," Review of Income and Wealth, Blackwell Publishing, vol. 39(4), pages 337-56, December.
  16. Ok, Efe A. & Lambert, Peter J., 1999. "On evaluating social welfare by sequential generalized Lorenz dominance," Economics Letters, Elsevier, vol. 63(1), pages 45-53, April. [Downloadable!] (restricted)
  17. Atkinson, A. B., 1990. "Public economics and the economic public," European Economic Review, Elsevier, vol. 34(2-3), pages 225-248, May. [Downloadable!] (restricted)
  18. Ebert, Udo, 1997. "Social Welfare When Needs Differ: An Axiomatic Approach," Economica, London School of Economics and Political Science, vol. 64(254), pages 233-44, May. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Erwin Ooghe & Peter J. Lambert, 2005. "On Bounded Dominance Criteria," University of Oregon Economics Department Working Papers 2005-6, University of Oregon Economics Department, revised 01 May 2005. [Downloadable!]
    Other versions:
  2. Claudio Zoli & Peter J. Lambert, 2005. "Sequential procedures for poverty gap dominance," University of Oregon Economics Department Working Papers 2005-1, University of Oregon Economics Department, revised 01 Jan 2005. [Downloadable!]
  3. Magne Mogstad, 2007. "Measuring Income Inequality under Restricted Interpersonal Comparability," Discussion Papers 498, Research Department of Statistics Norway. [Downloadable!]
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