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Inequality in Australia 1983-2004: A Stochastic Dominance Approach

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  • Hooi Hooi Lean
  • Ma. Rebecca Valenzuela

Abstract

In this paper, we employ stochastic dominance analysis on Australian unit records to investigate trends in inequality and relative welfare levels in Australia over the period 1983 to 2004. We find that that when the stochastic dominance tests are applied to income and expenditure distributions for the entire population, net transfers to households do not appear to make any significant difference on the distribution of inequality existing for each year. However, when analysis is applied to particular population subgroups in the economy, the tests show that taxes and transfers do improve existing imbalances in the distribution of welfare. Our group results strong evidence of long-term disparities in the relative welfare levels of male-headed over female-headed households, of households with children over those without, and of couple-parents families over their single-parent counterparts.

Suggested Citation

  • Hooi Hooi Lean & Ma. Rebecca Valenzuela, 2012. "Inequality in Australia 1983-2004: A Stochastic Dominance Approach," Monash Economics Working Papers 06-12, Monash University, Department of Economics.
    • Handle: RePEc:mos:moswps:2012-06
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    File URL: http://www.buseco.monash.edu.au/eco/research/papers/2012/0612inequalityleanvalenzuela.pdf
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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