Income-Related Health Transfers Principles and Orderings of Joint Distributions of Income and Health

The objective of this article is to provide the analyst with the necessary tools that allow for a robust ordering of joint distributions of health and income. We contribute to the literature on the measurement and inference of socioeconomic health inequality in three distinct but complementary ways. First, we provide a formalization of the socioeconomic health inequality-specific ethical principle introduced by Erreygers Clark and van Ourti, (2012). Second, we propose new graphical tools and dominance tests for the identification of robust orderings of joint distributions of income and health associated with this new ethical principle. Finally, based on both pro-poor and proextreme ranks ethical principles we address a very important aspect of dominance literature: the inference. To illustrate the empirical relevance of the proposed approach, we compare joint distributions of income and a health-related behaviour in the United States in 1997 and 2014.