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Welfare and Inequality Comparisons for Uni- and Multi-dimensional Distributions of Ordinal Data

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  • Frank A Cowell
  • Martyna Kobus
  • Radoslaw Kurek

Abstract

Decision makers and social planners are often faced with a problem of evaluating distributions of ordinal variables i.e. variables for which there are no numbers but only the ordering, such as, for example, self-reported health status, life satisfaction, working environment, quality of public goods, living conditions etc. Standard tools, namely, stochastic dominance, and inequality and risk measures, produce conclusions that can be reversed depending on the cardinalisation of an ordinal indicator which is arbitrary. Utilising the notion of integration on partially ordered sets we extend the well-known Hardy et al. (1934) result to an ordinal setting, both univariate and multivariate.

Suggested Citation

  • Frank A Cowell & Martyna Kobus & Radoslaw Kurek, 2017. "Welfare and Inequality Comparisons for Uni- and Multi-dimensional Distributions of Ordinal Data," STICERD - Public Economics Programme Discussion Papers 31, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
  • Handle: RePEc:cep:stippp:31
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    Cited by:

    1. Lin Yang, 2017. "The relationship between poverty and inequality: Concepts and measurement," CASE Papers /205, Centre for Analysis of Social Exclusion, LSE.
    2. Yang, Lin, 2017. "The relationship between poverty and inequality: concepts and measurement," LSE Research Online Documents on Economics 103491, London School of Economics and Political Science, LSE Library.
    3. Martyna Kobus & Radosław Kurek, 2019. "Multidimensional polarization for ordinal data," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 17(3), pages 301-317, September.
    4. Thi Kim Thanh Bui & Guido Erreygers, 2020. "Multidimensional Inequality in Vietnam, 2002–2012," Economies, MDPI, vol. 8(2), pages 1-31, April.
    5. Suman Seth & Gaston Yalonetzky, 2021. "Assessing Deprivation with an Ordinal Variable: Theory and Application to Sanitation Deprivation in Bangladesh," The World Bank Economic Review, World Bank, vol. 35(3), pages 793-811.

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    More about this item

    Keywords

    Ordinal data; Inequality and Risk Orderings; Welfare orderings; Association;
    All these keywords.

    JEL classification:

    • D30 - Microeconomics - - Distribution - - - General
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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