IDEAS home Printed from https://ideas.repec.org/p/fip/fednsr/103671.html

Ordinal Complementarity

Author

Abstract

This paper introduces ordinal complementarity: a feature of stochastic production functions that is robust to monotonic transformations of inputs X and output Y. It has two equivalent definitions: supermodularity of the conditional survival function under a first-order stochastic dominance ordering, and supermodularity of E[Q(Y )|X] for all non-decreasing valuations Q. Relative to existing conventions, this definition offers a strengthening with more robust policy implications. Ordinal complementarity is necessary and sufficient for a number of social planner problems to have monotone solutions for all Q, including those with arbitrarily strong redistributive preferences. It is also testable—along with a number of related but weaker production properties—because it can be represented as a set of moment inequalities. An empirical application to the technology of cognitive skill formation for children finds different combinations of these properties at different ages, leading to new insights.

Suggested Citation

  • Martín García-Vázquez & Martín Almuzara & Joseph Mullins, 2026. "Ordinal Complementarity," Staff Reports 1199, Federal Reserve Bank of New York.
    • Handle: RePEc:fip:fednsr:103671
    DOI: 10.59576/sr.1199
    as

    Download full text from publisher

    File URL: https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr1199.pdf
    File Function: Full-text
    Download Restriction: no
    File URL: https://www.newyorkfed.org/research/staff_reports/sr1199.html
    File Function: Summary
    Download Restriction: no
    File URL: https://libkey.io/10.59576/sr.1199?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • D1 - Microeconomics - - Household Behavior
    • C4 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fednsr:103671. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gabriella Bucciarelli (email available below). General contact details of provider: https://edirc.repec.org/data/frbnyus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.