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Multivariate Discrete First Order Stochastic Dominance

Author

Listed:
  • 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.

Suggested Citation

  • Finn Tarp & Lars Peter Østerdal, 2007. "Multivariate Discrete First Order Stochastic Dominance," Discussion Papers 07-23, University of Copenhagen. Department of Economics.
  • Handle: RePEc:kud:kuiedp:0723
    as

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    File URL: http://www.econ.ku.dk/english/research/publications/wp/2007/0723.pdf/
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    multidimensional first degree distributional dominance; robust poverty gap dominance; majorization; generalized equivalence result;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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