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Testing for bivariate stochastic dominance using inequality restrictions

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  • Stengos, Thanasis
  • Thompson, Brennan S.

Abstract

We propose a test of bivariate stochastic dominance within a generalized framework for testing inequality restrictions, utilizing the covariance structure of the estimates of the joint distribution functions. Monte Carlo simulations and an empirical example assess its usefulness.

Suggested Citation

  • Stengos, Thanasis & Thompson, Brennan S., 2012. "Testing for bivariate stochastic dominance using inequality restrictions," Economics Letters, Elsevier, vol. 115(1), pages 60-62.
  • Handle: RePEc:eee:ecolet:v:115:y:2012:i:1:p:60-62
    DOI: 10.1016/j.econlet.2011.11.041
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    1. repec:eee:jhecon:v:57:y:2018:i:c:p:315-331 is not listed on IDEAS
    2. Khaled, Mohamad A. & Makdissi, Paul & Yazbeck, Myra, 2018. "Income-related health transfers principles and orderings of joint distributions of income and health," Journal of Health Economics, Elsevier, vol. 57(C), pages 315-331.

    More about this item

    Keywords

    Stochastic dominance; Inequality restrictions; Multidimensional welfare;

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty

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