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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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Author Info

  • Channing Arndt

    (Department of Economics, University of Copenhagen)

  • Roberta Distante

    (Department of Economics, University of Copenhagen)

  • M. Azhar Hussain

    (Department of Economics, University of Copenhagen)

  • Lars Peter Østerdal

    (Department of Economics, University of Copenhagen)

  • Pham Lan Huong

    (Central Institute for Economic Management (CIEM), Vietnam)

  • Maimuna Ibraimo

    (Ministry of Planning and Development (MPD), Mozambique)

Abstract

We develop an ordinal method for making welfare comparisons between populations with multidimensional discrete well-being indicators observed at the micro level. The approach assumes that, for each well-being indicator, the levels can be ranked from worse to better; however, no assumptions are made about relative importance of any dimension nor about complementarity/substitutability relationships between dimensions. The method is based on the concept of multidimensional first order dominance. We introduce a rapid and reliable algorithm for empirically determining whether one population dominates another on the basis of available binary indicators by drawing upon linear programming theory. These approaches are applied to household survey data from Vietnam and Mozambique with a focus on child poverty comparisons over time and between regions.

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Bibliographic Info

Paper provided by University of Copenhagen. Department of Economics in its series Discussion Papers with number 11-13.

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Length: 23 pages
Date of creation: Apr 2011
Date of revision:
Handle: RePEc:kud:kuiedp:1113

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  1. 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.
  2. Johannes Gräb & Michael Grimm, 2007. "Robust Multiperiod Poverty Comparisons," Discussion Papers of DIW Berlin 725, DIW Berlin, German Institute for Economic Research.
  3. 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.
  4. 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.
  5. Yélé Maweki Batana & Jean-Yves Duclos, 2010. "Comparing Multidimensional Poverty with Qualitative Indicators of Well-Being," Cahiers de recherche 1004, CIRPEE.
  6. Channing Arndt & Andres Garcia & Finn Tarp & James Thurlow, 2012. "Poverty Reduction and Economic Structure: Comparative Path Analysis for Mozambique and Vietnam," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 58(4), pages 742-763, December.
  7. 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.
  8. Alkire, Sabina, 2008. "Choosing Dimensions: The Capability Approach and Multidimensional Poverty," MPRA Paper 8862, University Library of Munich, Germany.
  9. 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(3-4), pages 239-246, April.
  10. Duclos, Jean-Yves & Sahn, David & Younger, Stephen D., 2001. "Robust Multidimensional Poverty Comparisons," Cahiers de recherche 0115, Université Laval - Département d'économique.
  11. Nicolas Gravel & Abhiroop Mukhopadhyay, 2010. "Is India better off today than 15 years ago? A robust multidimensional answer," Journal of Economic Inequality, Springer, vol. 8(2), pages 173-195, June.
  12. Alkire, Sabina & Foster, James, 2011. "Counting and multidimensional poverty measurement," Journal of Public Economics, Elsevier, vol. 95(7), pages 476-487.
  13. Bourguignon, Francois, 1989. "Family size and social utility : Income distribution dominance criteria," Journal of Econometrics, Elsevier, vol. 42(1), pages 67-80, September.
  14. 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.
  15. 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.
  16. 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.
  17. 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.
  18. François Bourguignon & Satya Chakravarty, 2003. "The Measurement of Multidimensional Poverty," Journal of Economic Inequality, Springer, vol. 1(1), pages 25-49, April.
  19. Ian Crawford, 2005. "A nonparametric test of stochastic dominance in multivariate distributions," School of Economics Discussion Papers 1205, School of Economics, University of Surrey.
  20. Sen, Amartya, 1973. "On Economic Inequality," OUP Catalogue, Oxford University Press, number 9780198281931.
  21. Roelen, Keetie & Gassmann, Franziska, 2008. "Measuring Child Poverty and Well-Being: a literature review," MPRA Paper 8981, University Library of Munich, Germany.
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Cited by:
  1. 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.
  2. 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).
  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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