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Comparisons of heterogeneous distributions and dominance criteria

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  • Moyes, Patrick

Abstract

We are interested in the comparisons of standard-of-living across societies when observations of both income and household structure are available. We generalise the approach of A.B. Atkinson and F. Bourguignon (1987) [3] to the case where the marginal distributions of needs can vary across the household populations under comparison. We assume that a sympathetic observer uses a utilitarian social welfare function in order to rank heterogeneous income distributions. Insofar as any individual can play the role of the observer, we take the unanimity point of view according to which the plannerʼs judgements have to comply with a certain number of basic normative principles. We impose increasingly restrictive conditions on the householdʼs utility function and we investigate their effects on the resulting rankings of the distributions. This leads us to propose four dominance criteria that can be used for providing an unambiguous ranking of income distributions for heterogeneous populations.

Suggested Citation

  • Moyes, Patrick, 2012. "Comparisons of heterogeneous distributions and dominance criteria," Journal of Economic Theory, Elsevier, vol. 147(4), pages 1351-1383.
  • Handle: RePEc:eee:jetheo:v:147:y:2012:i:4:p:1351-1383
    DOI: 10.1016/j.jet.2011.12.001
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    References listed on IDEAS

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    1. Udo Ebert & Patrick Moyes, 2009. "Household decisions and equivalence scales," Journal of Population Economics, Springer;European Society for Population Economics, vol. 22(4), pages 1039-1062, October.
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    Citations

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    Cited by:

    1. Patrick MOYES, 2013. "Rearrangements and Sequential Rank Order Dominance," Cahiers du GREThA 2013-10, Groupe de Recherche en Economie Théorique et Appliquée.
    2. Gravel, Nicolas & Moyes, Patrick, 2012. "Ethically robust comparisons of bidimensional distributions with an ordinal attribute," Journal of Economic Theory, Elsevier, vol. 147(4), pages 1384-1426.
    3. Gottschalk, Tina & Range, Troels Martin & Sudhölter, Peter & Østerdal, Lars Peter, 2015. "Decomposing bivariate dominance for social welfare comparisons," Discussion Papers of Business and Economics 12/2015, University of Southern Denmark, Department of Business and Economics.
    4. Marc Fleurbaey & Cyrille Hagneré & Alain Trannoy, 2007. "Welfare Comparisons of Income Distributions and Family Size," IDEP Working Papers 0702, Institut d'economie publique (IDEP), Marseille, France, revised 16 Jan 2007.
    5. 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), pages 239-246.
    6. Gajdos, Thibault & Weymark, John A., 2012. "Introduction to inequality and risk," Journal of Economic Theory, Elsevier, vol. 147(4), pages 1313-1330.
    7. Lambert, Peter J & Ramos, Xavier, 2002. "Welfare Comparisons: Sequential Procedures for Heterogeneous Populations," Economica, London School of Economics and Political Science, vol. 69(276), pages 549-562, November.
    8. Christophe Muller & Alain Trannoy, 2003. "A Dominance Approach to Well-Being Inequality across Countries," IDEP Working Papers 0313, Institut d'economie publique (IDEP), Marseille, France.
    9. N. GRAVEL & Patrick MOYES (GREThA UMR CNRS 5113), 2008. "Bidimensional Inequalities with an Ordinal Variable," Cahiers du GREThA 2008-14, Groupe de Recherche en Economie Théorique et Appliquée.
    10. Sonne-Schmidt, Christoffer & Tarp, Finn & Østerdal, Lars Peter, 2013. "Ordinal Multidimensional Inequality," WIDER Working Paper Series 097, World Institute for Development Economic Research (UNU-WIDER).
    11. Christoffer Sonne-Schmidt & Finn Tarp & Lars Peter Østerdal, 2016. "Ordinal Bivariate Inequality: Concepts and Application to Child Deprivation in Mozambique," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 62(3), pages 559-573, September.
    12. Patrick MOYES (GREThA, CNRS, UMR 5113), 2011. "Rearrangements and Sequential Rank Order Dominance. A Result with Economic Applications," Cahiers du GREThA 2011-35, Groupe de Recherche en Economie Théorique et Appliquée.
    13. Louis Eeckhoudt & Béatrice Rey & Harris Schlesinger, 2007. "A Good Sign for Multivariate Risk Taking," Management Science, INFORMS, vol. 53(1), pages 117-124, January.
    14. Udo Ebert & Patrick Moyes, 2017. "Inequality and isoelastic equivalence scales: restrictions and implications," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 48(2), pages 295-326, February.
    15. Moyes, Patrick, 2013. "Rearrangements and sequential rank order dominance," Journal of Mathematical Economics, Elsevier, vol. 49(4), pages 278-290.

    More about this item

    Keywords

    Normative analysis; Utilitarianism; Welfarism; Multidimensional inequality and welfare; Bidimensional stochastic dominance; Inequality reducing transformations;

    JEL classification:

    • D30 - Microeconomics - - Distribution - - - General
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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