Multidimensional inequality comparisons: A compensation perspective
AbstractWe provide a unified treatment of the two approaches pioneered by Atkinson and Bourguignon (1982, 1987) [3,4] by resorting to compensation principles in the bivariate case. We treat the attributes of individual utility asymmetrically by assuming that one attribute can be used to compensate another. Our main result consists of two sufficient second-order stochastic dominance conditions. In the case where the compensated variable has a discrete distribution, the distribution of the compensating variable must satisfy a condition which degenerates to the Sequential Generalized Lorenz test for identical marginal distributions of the compensated variable. Furthermore, the distributions of the compensated variable must satisfy the Generalized Lorenz test.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Theory.
Volume (Year): 147 (2012)
Issue (Month): 4 ()
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Web page: http://www.elsevier.com/locate/inca/622869
Multidimensional welfare; Compensation; Dominance; Lorenz criterion;
Find related papers by JEL classification:
- D3 - Microeconomics - - Distribution
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- I31 - Health, Education, and Welfare - - Welfare and Poverty - - - General Welfare
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