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Ordinal Welfare Comparisons with Multiple Discrete Indicators: A First Order Dominance Approach and Application to Child Poverty

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  • Arndt, Channing
  • Distante, Roberta
  • Hussain, M. Azhar
  • Østerdal, Lars Peter
  • Huong, Pham Lan
  • Ibraimo, Maimuna

Abstract

We develop an approach for making welfare comparisons between populations with multidimensional discrete well-being indicators observed at the micro level. The approach is rooted in the concept of multidimensional first order dominance. It assumes that, for each indicator, the levels can be ranked ordinally from worse to better; however, no assumptions are made about relative importance of any dimension nor about complementarity/substitutability relationships between dimensions. We also introduce an efficient algorithm for determining dominance and employ a bootstrap approach that permits cardinal rankings of populations. These approaches are applied to household survey data from Vietnam and Mozambique.

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Bibliographic Info

Article provided by Elsevier in its journal World Development.

Volume (Year): 40 (2012)
Issue (Month): 11 ()
Pages: 2290-2301

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Handle: RePEc:eee:wdevel:v:40:y:2012:i:11:p:2290-2301

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Web page: http://www.elsevier.com/locate/worlddev

Related research

Keywords: ordinal; welfare; multi-dimensional poverty measurement; first order dominance; Mozambique; Vietnam;

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References

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  1. Johannes Gräb & Michael Grimm, 2007. "Robust Multiperiod Poverty Comparisons," Ibero America Institute for Econ. Research (IAI) Discussion Papers 160, Ibero-America Institute for Economic Research.
  2. Channing Arndt & Andres Garcia & Finn Tarp & James Thurlow, 2010. "Poverty Reduction and Economic Structure Comparative Path Analysis for Mozambique and Vietnam," Working Paper Series wp2010-122, World Institute for Development Economic Research (UNU-WIDER).
  3. Alkire, Sabina & Foster, James, 2011. "Counting and multidimensional poverty measurement," Journal of Public Economics, Elsevier, vol. 95(7-8), pages 476-487, August.
  4. Nicolas Gravel & Abhiroop Mukhopadhyay, 2007. "Is India Better off Today than 15 Years ago? A Robust Multidimensional Answer," IDEP Working Papers 0704, Institut d'economie publique (IDEP), Marseille, France, revised 18 May 2007.
  5. Bourguignon, Francois, 1989. "Family size and social utility : Income distribution dominance criteria," Journal of Econometrics, Elsevier, vol. 42(1), pages 67-80, September.
  6. Roelen, Keetie & Gassmann, Franziska, 2008. "Measuring Child Poverty and Well-Being: a literature review," MPRA Paper 8981, University Library of Munich, Germany.
  7. Sen, Amartya, 1973. "On Economic Inequality," OUP Catalogue, Oxford University Press, number 9780198281931.
  8. Bourguignon, F. & Chakravarty, S.R., 1998. "The Measurement of Multidimensional Poverty," DELTA Working Papers 98-12, DELTA (Ecole normale supérieure).
  9. Levhari, David & Paroush, Jacob & Peleg, Bezalel, 1975. "Efficiency Analysis for Multivariate Distributions," Review of Economic Studies, Wiley Blackwell, vol. 42(1), pages 87-91, January.
  10. Nicolas Gravel & Patrick Moyes & Beno�T Tarroux, 2009. "Robust International Comparisons of Distributions of Disposable Income and Regional Public Goods," Economica, London School of Economics and Political Science, vol. 76(303), pages 432-461, 07.
  11. Yélé Maweki Batana & Jean-Yves Duclos, 2010. "Comparing Multidimensional Poverty with Qualitative Indicators of Well-Being," Cahiers de recherche 1004, CIRPEE.
  12. Vijay S. Bawa & Eric B. Lindenberg & Lawrence C. Rafsky, 1979. "An Efficient Algorithm to Determine Stochastic Dominance Admissible Sets," Management Science, INFORMS, vol. 25(7), pages 609-622, July.
  13. Østerdal, Lars Peter, 2010. "The mass transfer approach to multivariate discrete first order stochastic dominance: Direct proof and implications," Journal of Mathematical Economics, Elsevier, vol. 46(6), pages 1222-1228, November.
  14. Nicole Rippin, 2010. "Poverty Severity in a Multidimensional Framework: The Issue of Inequality between Dimensions," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 47, Courant Research Centre PEG.
  15. Jean-Yves Duclos & David E. Sahn & Stephen D. Younger, 2006. "Robust Multidimensional Poverty Comparisons," Economic Journal, Royal Economic Society, vol. 116(514), pages 943-968, October.
  16. Ian Crawford, 2005. "A nonparametric test of stochastic dominance in multivariate distributions," School of Economics Discussion Papers 1205, School of Economics, University of Surrey.
  17. Alkire, Sabina, 2008. "Choosing Dimensions: The Capability Approach and Multidimensional Poverty," MPRA Paper 8862, University Library of Munich, Germany.
  18. Atkinson, Anthony B & Bourguignon, Francois, 1982. "The Comparison of Multi-Dimensioned Distributions of Economic Status," Review of Economic Studies, Wiley Blackwell, vol. 49(2), pages 183-201, April.
  19. Muller, Christophe & Trannoy, Alain, 2011. "A dominance approach to the appraisal of the distribution of well-being across countries," Journal of Public Economics, Elsevier, vol. 95(3), pages 239-246.
  20. Keetie Roelen & Franziska Gassmann & Chris Neubourg, 2010. "Child Poverty in Vietnam: Providing Insights Using a Country-Specific and Multidimensional Model," Social Indicators Research, Springer, vol. 98(1), pages 129-145, August.
  21. Christoffer Sonne-Schmidt & Finn Tarp & Lars Peter Østerdal, 2008. "Ordinal Comparison of Multidimensional Deprivation: theory and application," Discussion Papers 08-33, University of Copenhagen. Department of Economics.
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Cited by:
  1. Sonne-Schmidt, Christoffer & Tarp, Finn & Osterdal, Lars Peter, 2013. "Ordinal multidimensional inequality," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  2. Hussain, M. Azhar & Jørgensen, Mette Møller & Østerdal, Lars Peter, 2014. "Refining Population Health Comparisons: A Multidimensional First Order Dominance Approach," COHERE Working Paper 2014:5, COHERE - Centre of Health Economics Research, University of Southern Denmark.
  3. Range, Troels Martin & Østerdal, Lars Peter, 2013. "Checking bivariate first order dominance," Discussion Papers of Business and Economics 9/2013, Department of Business and Economics, University of Southern Denmark.

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