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Multivariate Discrete First Order Stochastic Dominance

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  • Finn Tarp

    (Department of Economics, University of Copenhagen)

  • Lars Peter Østerdal

    (Department of Economics, University of Copenhagen)

Abstract

This paper characterizes the principle of first order stochastic dominance in a multivariate discrete setting. We show that a distribution f first order stochastic dominates distribution g if and only if f can be obtained from g by iteratively shifting density from one outcome to another that is better. For the bivariate case, we develop the theoretical basis for an algorithmic dominance test that is easy to implement.

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File URL: http://www.econ.ku.dk/english/research/publications/wp/2007/0723.pdf/
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Bibliographic Info

Paper provided by University of Copenhagen. Department of Economics in its series Discussion Papers with number 07-23.

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Length: 23 pages
Date of creation: Oct 2007
Date of revision:
Handle: RePEc:kud:kuiedp:0723

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Related research

Keywords: multidimensional first degree distributional dominance; robust poverty gap dominance; majorization; generalized equivalence result;

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  1. Nicolas Gravel & Patrick Moyes, 2006. "Ethically Robust Comparisons of Distributions of Two Individual Attributes," IDEP Working Papers, Institut d'economie publique (IDEP), Marseille, France 0605, Institut d'economie publique (IDEP), Marseille, France, revised Aug 2006.
  2. John A. Weymark, 2003. "The Normative Approach to the Measurement of Multidimensional Inequality," Vanderbilt University Department of Economics Working Papers 0314, Vanderbilt University Department of Economics, revised Jan 2004.
  3. Jean-Yves Duclos & David E. Sahn & Stephen D. Younger, 2006. "Robust Multidimensional Poverty Comparisons," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 116(514), pages 943-968, October.
  4. Bourguignon, Francois, 1989. "Family size and social utility : Income distribution dominance criteria," Journal of Econometrics, Elsevier, Elsevier, vol. 42(1), pages 67-80, September.
  5. Atkinson, Anthony B & Bourguignon, Francois, 1982. "The Comparison of Multi-Dimensioned Distributions of Economic Status," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 49(2), pages 183-201, April.
  6. Allison, R. Andrew & Foster, James E., 2004. "Measuring health inequality using qualitative data," Journal of Health Economics, Elsevier, Elsevier, vol. 23(3), pages 505-524, May.
  7. Gleb Koshevoy, 1997. "The Lorenz zonotope and multivariate majorizations," Social Choice and Welfare, Springer, Springer, vol. 15(1), pages 1-14.
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