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On the importance of the upside down test in absolute socioeconomic health inequality comparisons

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Listed:
  • Mohamad Khaled
  • Paul Makdissi
  • Myra Yazbeck

Abstract

This paper shows that it is impossible to obtain a robust ranking of absolute socioeconomic health inequality if one only imposes Bleichrodt and van Doorslaer's (2006) principle of income-related health transfer. This means that for any comparison, some indices obeying this ethical principle will always contradict the ranking produced by other indices obeying the same ethical principle. This results points to the need to impose more ethical structure on indices when one wants to identify robust rankings of absolute socioeconomic health inequality. We show that imposing Erreygers, Clarke and Van Ourti's (2012) upside down test allows for the identification of robust orderings of absolute health inequality. We also show that alternatively one can increase inequality aversion and impose higher order pro-poor principles of income-related health transfer sensitivity. In order to make the identification of all robust orderings implementable using survey data, the paper also discusses statistical inference for these positional dominance tests. To illustrate the empirical relevance of the proposed approach, we compare joint distributions of income and a health-related behavior in the United States in 1997 and 2014.

Suggested Citation

  • Mohamad Khaled & Paul Makdissi & Myra Yazbeck, 2018. "On the importance of the upside down test in absolute socioeconomic health inequality comparisons," Working Papers 180003, Canadian Centre for Health Economics.
  • Handle: RePEc:cch:wpaper:180003
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    References listed on IDEAS

    as
    1. Paul Makdissi & Stéphane Mussard, 2008. "Analyzing the impact of indirect tax reforms on rank-dependent social welfare functions: a positional dominance approach," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 30(3), pages 385-399, April.
    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.
    3. Mehran, Farhad, 1976. "Linear Measures of Income Inequality," Econometrica, Econometric Society, vol. 44(4), pages 805-809, July.
    4. Wagstaff, Adam, 2002. "Inequality aversion, health inequalities and health achievement," Journal of Health Economics, Elsevier, vol. 21(4), pages 627-641, July.
    5. Guido Erreygers & Philip Clarke & Qiong Zheng, 2017. "On the measurement of socioeconomic inequality of health between countries," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 15(2), pages 175-193, June.
    6. Allison, R. Andrew & Foster, James E., 2004. "Measuring health inequality using qualitative data," Journal of Health Economics, Elsevier, vol. 23(3), pages 505-524, May.
    7. Makdissi, Paul & Yazbeck, Myra, 2014. "Measuring socioeconomic health inequalities in presence of multiple categorical information," Journal of Health Economics, Elsevier, vol. 34(C), pages 84-95.
    8. Paul Makdissi & Myra Yazbeck, 2017. "Robust rankings of socioeconomic health inequality using a categorical variable," Health Economics, John Wiley & Sons, Ltd., vol. 26(9), pages 1132-1145, September.
    9. Marcel Bilger & Eliza J. Kruger & Eric A. Finkelstein, 2017. "Measuring Socioeconomic Inequality in Obesity: Looking Beyond the Obesity Threshold," Health Economics, John Wiley & Sons, Ltd., vol. 26(8), pages 1052-1066, August.
    10. Erreygers, Guido & Clarke, Philip & Van Ourti, Tom, 2012. "“Mirror, mirror, on the wall, who in this land is fairest of all?”—Distributional sensitivity in the measurement of socioeconomic inequality of health," Journal of Health Economics, Elsevier, vol. 31(1), pages 257-270.
    11. Bleichrodt, Han & van Doorslaer, Eddy, 2006. "A welfare economics foundation for health inequality measurement," Journal of Health Economics, Elsevier, vol. 25(5), pages 945-957, September.
    12. Schechtman, Edna & Shelef, Amit & Yitzhaki, Shlomo & Zitikis, RiÄ ardas, 2008. "Testing Hypotheses About Absolute Concentration Curves And Marginal Conditional Stochastic Dominance," Econometric Theory, Cambridge University Press, vol. 24(4), pages 1044-1062, August.
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    More about this item

    Keywords

    Generalized health concentration curves; generalized health range curves; absolute socioeconomic health inequality; stochastic dominance; inference;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I10 - Health, Education, and Welfare - - Health - - - General

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