On Bounded Dominance Criteria
A well-known criterion to make heterogeneous welfare comparisons is Atkinson and BourguignonÂ’s (1987) sequential generalized Lorenz dominance (SGLD) criterion. Recently, Fleurbaey, HagnerÃ© and Trannoy (2003) convincingly argue that it contains unreasonable household utility profiles and suggest to put (lower and upper) bounds on the needs of the different household types. First, we generalize Atkinson and BourguignonÂ’s SGLD criterion, by introducing lower bounds in the household utility profiles. Second, we propose a new SGLD criterion by introducing upper bounds in a similar way. Third, we impose lower and upper bounds simultaneously and obtain a criterion which is intermediate between EbertÂ’s (1999) equivalence scale weighted approach and Atkinson and BourguignonÂ’s (1987) SGLD approach.
|Date of creation:||01 May 2005|
|Date of revision:||01 May 2005|
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- Bourguignon, Francois, 1989. "Family size and social utility : Income distribution dominance criteria," Journal of Econometrics, Elsevier, vol. 42(1), pages 67-80, September.
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"Welfare comparisons with bounded equivalence scales,"
THEMA Working Papers
98-23, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
- Fleurbaey, Marc & Hagnere, Cyrille & Trannoy, Alain, 2003. "Welfare comparisons with bounded equivalence scales," Journal of Economic Theory, Elsevier, vol. 110(2), pages 309-336, June.
- Fleurbaey, M. & Hagnere, C. & Trannoy, A., 1998. "Welfare Comparisons with Bounded Equivalence Scales," Papers 9823, Paris X - Nanterre, U.F.R. de Sc. Ec. Gest. Maths Infor..
- Peter J. Lambert & Xavier Ramos, 2001.
"Welfare comparisons: sequential procedures for heterogenous populations,"
wp0114, Department of Applied Economics at Universitat Autonoma of Barcelona.
- Lambert, Peter J & Ramos, Xavier, 2002. "Welfare Comparisons: Sequential Procedures for Heterogeneous Populations," Economica, London School of Economics and Political Science, vol. 69(276), pages 549-62, November.
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- Udo Ebert, 1999. "Using equivalent income of equivalent adults to rank income distributions," Social Choice and Welfare, Springer, vol. 16(2), pages 233-258.
- Atkinson, A B, 1992. "Measuring Poverty and Differences in Family Composition," Economica, London School of Economics and Political Science, vol. 59(233), pages 1-16, February.
- Ebert, Udo, 1997. "Social Welfare When Needs Differ: An Axiomatic Approach," Economica, London School of Economics and Political Science, vol. 64(254), pages 233-44, May.
- Jenkins, Stephen P & Lambert, Peter J, 1993. "Ranking Income Distributions When Needs Differ," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 39(4), pages 337-56, December.
- Chambaz, Christine & Maurin, Eric, 1998. "Atkinson and Bourguignon's Dominance Criteria: Extended and Applied to the Measurement of Poverty in France," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 44(4), pages 497-513, December.
- Anthony Shorrocks, 2004. "Inequality and welfare evaluation of heterogeneous income distributions," Journal of Economic Inequality, Springer, vol. 2(3), pages 193-218, July.
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