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Stochastic Dominance

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  • Russell Davidson

Abstract

The concept of stochastic dominance is defined, and its relation to welfare, poverty, and income inequality explained. A brief discussion is provided of how statistical inference may be performed for hypotheses relating to stochastic dominance.

Suggested Citation

  • Russell Davidson, 2006. "Stochastic Dominance," Departmental Working Papers 2006-19, McGill University, Department of Economics.
    • Handle: RePEc:mcl:mclwop:2006-19
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    File URL: http://www.mcgill.ca/files/economics/stochasticdominance.pdf
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    8. Russell Davidson & Jean-Yves Duclos, 2000. "Statistical Inference for Stochastic Dominance and for the Measurement of Poverty and Inequality," Econometrica, Econometric Society, vol. 68(6), pages 1435-1464, November.
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    12. Ian Rongve, 1997. "Statistical inference for poverty indices with fixed poverty lines," Applied Economics, Taylor & Francis Journals, vol. 29(3), pages 387-392.
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    14. Kaur, Amarjot & Prakasa Rao, B.L.S. & Singh, Harshinder, 1994. "Testing for Second-Order Stochastic Dominance of Two Distributions," Econometric Theory, Cambridge University Press, vol. 10(5), pages 849-866, December.
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    Cited by:

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    2. Bibi, Sami & Duclos, Jean-Yves, 2007. "Equity and policy effectiveness with imperfect targeting," Journal of Development Economics, Elsevier, vol. 83(1), pages 109-140, May.
    3. Dominic Gasbarro & Wing-Keung Wong & J. Kenton Zumwalt, 2007. "Stochastic Dominance Analysis of iShares," The European Journal of Finance, Taylor & Francis Journals, vol. 13(1), pages 89-101.
    4. Sami Bibi, 2006. "Growth with Equity is Better for the Poor," Cahiers de recherche 0640, CIRPEE.
    5. Benoît Tarroux, 2012. "Are equalization payments making Canadians better off? A two-dimensional dominance answer," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 10(1), pages 19-44, March.
    6. Mireille Bardos, 2007. "What is at stake in the construction and use of credit scores?," Computational Economics, Springer;Society for Computational Economics, vol. 29(2), pages 159-172, March.
    7. Oliver Linton & Kyungchui (Kevin) Song & Yoon-Jae Whang, 2008. "Bootstrap tests of stochastic dominance with asymptotic similarity on the boundary," CeMMAP working papers CWP08/08, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    8. Sami Bibi, 2005. "When is Economic Growth Pro-Poor? Evidence from Tunisia," Cahiers de recherche 0522, CIRPEE.
    9. Michael C. Burda & Bernd Fitzenberger & Alexander Lembcke & Thorsten Vogel, 2008. "Unionization, Stochastic Dominance, and Compression of the Wage Distribution: Evidence from Germany," SFB 649 Discussion Papers SFB649DP2008-041, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
    10. Jean-Yves Duclos & Paul Makdissi, 2000. "Restricted and Unrestricted Dominance Welfare, Inequality and Povery Orderings," Cahiers de recherche 00-01, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.
    11. Boèvi Kouglo Lawson Body & Kokou Baninganti & Etsri Homevoh & Etse Adjo Lamadokou, 2007. "Analyse comparative de l'état de pauvreté et d'inégalité au Togo: une approche multidimensionnelle basée sur l'indice de richesse/Comparative Analysis of Poverty and Inequality in Togo: a Multidimensi," Working Papers PMMA 2007-10, PEP-PMMA.
    12. Abhay Abhyankar & Keng-Yu Ho & Huainan Zhao, 2005. "Long-run post-merger stock performance of UK acquiring firms: a stochastic dominance perspective," Applied Financial Economics, Taylor & Francis Journals, vol. 15(10), pages 679-690.
    13. Brian Nolan & Bertrand Maitre, 2000. "A Comparative Perspective on Trends in Income Inequality in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 31(4), pages 329-350.

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    More about this item

    JEL classification:

    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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