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Bayesian inference for health inequality and welfare using qualitative data

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  • Gunawan, David
  • Griffiths, William E.
  • Chotikapanich, Duangkamon

Abstract

We show how to use Bayesian inference to compare two ordinal categorical distributions commonly occurring with data on self-reported health status. Procedures for computing probabilities for first and second order stochastic dominance and S-dominance are described, along with methodology for obtaining posterior densities for health inequality indexes. The techniques are applied to four years of data on Australian self-reported health status.

Suggested Citation

  • Gunawan, David & Griffiths, William E. & Chotikapanich, Duangkamon, 2018. "Bayesian inference for health inequality and welfare using qualitative data," Economics Letters, Elsevier, vol. 162(C), pages 76-80.
    • Handle: RePEc:eee:ecolet:v:162:y:2018:i:c:p:76-80
    DOI: 10.1016/j.econlet.2017.11.005
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    References listed on IDEAS

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    1. Gaston Yalonetzky, 2013. "Stochastic Dominance with Ordinal Variables: Conditions and a Test," Econometric Reviews, Taylor & Francis Journals, vol. 32(1), pages 126-163, January.
    2. Frank A. Cowell & Emmanuel Flachaire, 2017. "Inequality with Ordinal Data," Economica, London School of Economics and Political Science, vol. 84(334), pages 290-321, April.
    3. Joan Costa Font & Frank Cowell, 2013. "Measuring Health Inequality with Categorical Data: Some Regional Patterns," Research on Economic Inequality, in: Health and Inequality, volume 21, pages 53-76, Emerald Group Publishing Limited.
    4. Abul Naga, Ramses H. & Yalcin, Tarik, 2008. "Inequality measurement for ordered response health data," Journal of Health Economics, Elsevier, vol. 27(6), pages 1614-1625, December.
    5. David Madden, 2010. "Ordinal and cardinal measures of health inequality: an empirical comparison," Health Economics, John Wiley & Sons, Ltd., vol. 19(2), pages 243-250, February.
    6. Doorslaer, Eddy van & Jones, Andrew M., 2003. "Inequalities in self-reported health: validation of a new approach to measurement," Journal of Health Economics, Elsevier, vol. 22(1), pages 61-87, January.
    7. Duangkamon Chotikapanich & William E. Griffiths, 2006. "Bayesian Assessment of Lorenz and Stochastic Dominance in Income Distributions," Department of Economics - Working Papers Series 960, The University of Melbourne.
    8. Allison, R. Andrew & Foster, James E., 2004. "Measuring health inequality using qualitative data," Journal of Health Economics, Elsevier, vol. 23(3), pages 505-524, May.
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    Cited by:

    1. David M Kaplan & Wei Zhao, 2023. "Comparing latent inequality with ordinal data," The Econometrics Journal, Royal Economic Society, vol. 26(2), pages 189-214.

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    More about this item

    Keywords

    Dominance probabilities; Ordinal data; Inequality indexes;
    All these keywords.

    JEL classification:

    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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