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Ordinal Welfare Comparisons with Multiple Discrete Indicators: A First Order Dominance Approach and Application to Child Poverty

Author

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  • Channing Arndt

    (Department of Economics, University of Copenhagen)

  • Roberta Distante

    (Department of Economics, University of Copenhagen)

  • M. Azhar Hussain

    (Department of Economics, University of Copenhagen)

  • Lars Peter Østerdal

    (Department of Economics, University of Copenhagen)

  • Pham Lan Huong

    (Central Institute for Economic Management (CIEM), Vietnam)

  • Maimuna Ibraimo

    (Ministry of Planning and Development (MPD), Mozambique)

Abstract

We develop an ordinal method for making welfare comparisons between populations with multidimensional discrete well-being indicators observed at the micro level. The approach assumes that, for each well-being indicator, the levels can be ranked from worse to better; however, no assumptions are made about relative importance of any dimension nor about complementarity/substitutability relationships between dimensions. The method is based on the concept of multidimensional first order dominance. We introduce a rapid and reliable algorithm for empirically determining whether one population dominates another on the basis of available binary indicators by drawing upon linear programming theory. These approaches are applied to household survey data from Vietnam and Mozambique with a focus on child poverty comparisons over time and between regions.

Suggested Citation

  • Channing Arndt & Roberta Distante & M. Azhar Hussain & Lars Peter Østerdal & Pham Lan Huong & Maimuna Ibraimo, 2011. "Ordinal Welfare Comparisons with Multiple Discrete Indicators: A First Order Dominance Approach and Application to Child Poverty," Discussion Papers 11-13, University of Copenhagen. Department of Economics.
  • Handle: RePEc:kud:kuiedp:1113
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    References listed on IDEAS

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    1. Keetie Roelen & Franziska Gassmann & Chris Neubourg, 2010. "Child Poverty in Vietnam: Providing Insights Using a Country-Specific and Multidimensional Model," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 98(1), pages 129-145, August.
    2. Sonne-Schmidt, Christoffer & Tarp, Finn & Peter, Lars, 2011. "Ordinal multidimensional inequality: theory and application to the 2x2 case," MPRA Paper 72838, University Library of Munich, Germany.
    3. Jean-Yves Duclos & David E. Sahn & Stephen D. Younger, 2006. "Robust Multidimensional Poverty Comparisons," Economic Journal, Royal Economic Society, vol. 116(514), pages 943-968, October.
    4. Nicolas Gravel & Patrick Moyes & Benoît Tarroux, 2009. "Robust International Comparisons of Distributions of Disposable Income and Regional Public Goods," Economica, London School of Economics and Political Science, vol. 76(303), pages 432-461, July.
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    7. Grimm, Michael & Gräb, Johannes, 2007. "Robust Multiperiod Poverty Comparisons," Proceedings of the German Development Economics Conference, Göttingen 2007 8, Verein für Socialpolitik, Research Committee Development Economics.
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    14. Christoffer Sonne-Schmidt & Finn Tarp & Lars Peter Østerdal, 2008. "Ordinal Comparison of Multidimensional Deprivation: theory and application," Discussion Papers 08-33, University of Copenhagen. Department of Economics.
    15. Østerdal, Lars Peter, 2010. "The mass transfer approach to multivariate discrete first order stochastic dominance: Direct proof and implications," Journal of Mathematical Economics, Elsevier, vol. 46(6), pages 1222-1228, November.
    16. Alkire, Sabina, 2008. "Choosing Dimensions: The Capability Approach and Multidimensional Poverty," MPRA Paper 8862, University Library of Munich, Germany.
    17. 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).
    18. François Bourguignon & Satya Chakravarty, 2003. "The Measurement of Multidimensional Poverty," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 1(1), pages 25-49, April.
    19. Roelen, Keetie & Gassmann, Franziska, 2008. "Measuring Child Poverty and Well-Being: a literature review," MPRA Paper 8981, University Library of Munich, Germany.
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    22. Channing Arndt & Andres Garcia & Finn Tarp & James Thurlow, 2012. "Poverty Reduction and Economic Structure: Comparative Path Analysis for Mozambique and Vietnam," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 58(4), pages 742-763, December.
    23. Yélé Maweki Batana & Jean-Yves Duclos, 2010. "Comparing Multidimensional Poverty with Qualitative Indicators of Well-Being," Cahiers de recherche 1004, CIRPEE.
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    Cited by:

    1. Range, Troels Martin & Østerdal, Lars Peter, 2013. "Checking bivariate first order dominance," Discussion Papers of Business and Economics 9/2013, University of Southern Denmark, Department of Business and Economics.
    2. Channing Arndt & Kristi Mahrt & M. Azhar Hussain & Finn Tarp, 2017. "A human rights-consistent approach to multidimensional welfare measurement applied to sub-Saharan Africa," WIDER Working Paper Series 076, World Institute for Development Economic Research (UNU-WIDER).
    3. Channing Arndt & Vincent Leyaro & Kristi Mahrt, 2014. "Multi-dimensional poverty analysis for Tanzania: First order dominance approach with discrete indicators," WIDER Working Paper Series 146, World Institute for Development Economic Research (UNU-WIDER).
    4. M. Azhar Hussain, 2016. "EU Country Rankings’ Sensitivity to the Choice of Welfare Indicators," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 125(1), pages 1-17, January.
    5. Nanivazo, Malokele, 2014. "First order dominance analysis: Child wellbeing in the Democratic Republic of Congo," WIDER Working Paper Series 025, World Institute for Development Economic Research (UNU-WIDER).
    6. Martyna Kobus & Radoslaw Kurek, 2017. "Copula-based measurement of interdependence for discrete distributions," Working Papers 431, ECINEQ, Society for the Study of Economic Inequality.
    7. 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.
    8. Malokele Nanivazo, 2015. "First Order Dominance Analysis: Child Wellbeing in the Democratic Republic of Congo," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 122(1), pages 235-255, May.
    9. repec:spr:soinre:v:136:y:2018:i:1:d:10.1007_s11205-016-1541-9 is not listed on IDEAS
    10. 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.
    11. Udaya S. Mishra & Vachaspati Shukla, 2016. "Welfare Comparisons with Multidimensional Well-Being Indicators: An Indian Illustration," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 129(2), pages 505-525, November.
    12. repec:eee:wdevel:v:108:y:2018:i:c:p:181-196 is not listed on IDEAS
    13. Udaya S. Mishra & Vachaspati Shukla, 2015. "Welfare Comparisons with Multidimensional Well-Being Indicators: An Indian Illustration," Working Papers id:7095, eSocialSciences.
    14. Channing Arndt & Azhar M. Hussain & Vincenzo Salvucci & Finn Tarp & Lars Peter Østerdal, 2016. "Poverty Mapping Based on First‐Order Dominance with an Example from Mozambique," Journal of International Development, John Wiley & Sons, Ltd., vol. 28(1), pages 3-21, January.
    15. Masumbu, Gibson & Mahrt, Kristi, 2014. "Multidimensional welfare in districts of Zambia: A first order dominance approach," WIDER Working Paper Series 137, World Institute for Development Economic Research (UNU-WIDER).
    16. Fatiha Bennia & Nicolas Gravel, 2016. "Is the Distribution of Cardiovascular Risks Really Improving ? A Robust Analysis for France," Working Papers halshs-01321838, HAL.
    17. Shinkai, Naoko, 2016. "Examination of Poverty in Northern Mozambique: A Comparison of Social and Economic Dimensions," Working Papers 133, JICA Research Institute.
    18. Sonne-Schmidt, Christoffer & Tarp, Finn & Peter, Lars, 2011. "Ordinal multidimensional inequality: theory and application to the 2x2 case," MPRA Paper 72838, University Library of Munich, Germany.
    19. Kristi Mahrt & Gibson Masumbu, 2015. "Estimating multidimensional poverty in Zambia," WIDER Working Paper Series 137, World Institute for Development Economic Research (UNU-WIDER).
    20. Ajakaiye, Olu & Jerome, Afeikhena T. & Olaniyan, Olanrewaju & Mahrt, Kristi & Alaba, Olufunke A., 2014. "Multidimensional poverty in Nigeria: First order dominance approach," WIDER Working Paper Series 143, World Institute for Development Economic Research (UNU-WIDER).
    21. M. Azhar Hussain & Mette Møller Jørgensen & Lars Peter Østerdal, 2016. "Refining Population Health Comparisons: A Multidimensional First Order Dominance Approach," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 129(2), pages 739-759, November.
    22. 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).

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