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Inference for Lorenz curve orderings

Author

Listed:
  • VALENTINO DARDANONI
  • ANTONIO FORCINA

Abstract

In this paper we consider the issue of performing statistical inference for Lorenz curve orderings. This involves testing for an ordered relationship in a multivariate context and making comparisons among more than two population distributions. Our approach is to frame the hypotheses of interest as sets of linear inequality constraints on the vector of Lorenz curve ordinates, and apply order-restricted statistical inference to derive test statistics and their sampling distributions. We go on to relate our results to others which have appeared in recent literature, and use Monte Carlo analysis to highlight their respective properties and comparative performances. Finally, we discuss in general terms the issue and problems of framing hypotheses, and testing them, in the context of the study of income inequality, and suggest ways in which the distributional analyst could best proceed, illustrating with empirical examples.

Suggested Citation

  • Valentino Dardanoni & Antonio Forcina, 1999. "Inference for Lorenz curve orderings," Econometrics Journal, Royal Economic Society, vol. 2(1), pages 49-75.
    • Handle: RePEc:ect:emjrnl:v:2:y:1999:i:1:p:49-75
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