IDEAS home Printed from https://ideas.repec.org/p/qed/wpaper/1484.html
   My bibliography  Save this paper

Better Off or More Apart? Empirically Testing Welfare and Inequality Dominance Criteria

Author

Listed:
  • Charles Beach

Abstract

This paper provides the tools and procedures for empirically implementing several dominance criteria for social welfare comparisons and broad income inequality comparisons. Dominance criteria are expressed in terms of vectors of quantile ordinates based on income shares or quantile means. Statistical properties of these sample ordinates are established that allow a framework for statistical inference on these vectors. And practical empirical criteria are forwarded for using formal statistical inference tests to reach conclusions about ranking social welfare and inequality between distributions. Examples include rank dominance, generalized Lorenz dominance, dominance with crossing Lorenz curves, and distributional distance dominance between income groups.

Suggested Citation

  • Charles Beach, 2022. "Better Off or More Apart? Empirically Testing Welfare and Inequality Dominance Criteria," Working Paper 1484, Economics Department, Queen's University.
    • Handle: RePEc:qed:wpaper:1484
    as

    Download full text from publisher

    File URL: https://www.econ.queensu.ca/sites/econ.queensu.ca/files/wpaper/qed_wp_1484.pdf
    File Function: First version 2022
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Charles M. Beach & Russell Davidson & George A. Slotsve, 1994. "Distribution-Free Statistical Inference for Inequality Dominance with Crossing Lorenz Curves," Working Paper 912, Economics Department, Queen's University.
    2. Russell Davidson, 2018. "Statistical Inference on the Canadian Middle Class," Econometrics, MDPI, vol. 6(1), pages 1-18, March.
    3. Thomas Piketty & Emmanuel Saez & Gabriel Zucman, 2018. "Distributional National Accounts: Methods and Estimates for the United States," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 133(2), pages 553-609.
    4. Anthony F. Shorrocks & James E. Foster, 1987. "Transfer Sensitive Inequality Measures," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 54(3), pages 485-497.
    5. Beach, Charles M & Richmond, James, 1985. "Joint Confidence Intervals for Income Shares and Lorenz Curves," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 26(2), pages 439-450, June.
    6. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    7. Jorgenson, Dale W, 1990. "Aggregate Consumer Behavior and the Measurement of Social Welfare," Econometrica, Econometric Society, vol. 58(5), pages 1007-1040, September.
    8. Davies, James & Hoy, Michael, 1995. "Making Inequality Comparisons When Lorenz Curves Intersect," American Economic Review, American Economic Association, vol. 85(4), pages 980-986, September.
    9. Facundo Alvaredo & Lucas Chancel & Thomas Piketty & Gabriel Zucman, 2018. "Distributional National Accounts," Post-Print halshs-03342488, HAL.
    10. repec:bla:econom:v:50:y:1983:i:197:p:3-17 is not listed on IDEAS
    11. Rubin Saposnik, 1981. "Rank-dominance in income distributions," Public Choice, Springer, vol. 36(1), pages 147-151, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Charles Beach, 2023. "Quantile Tool Box Measures for Empirical Analysis and for Testing Distributional Comparisons in Direct Distribution-Free Fashion," Working Paper 1508, Economics Department, Queen's University.
    2. Rolf Aaberge, 2009. "Ranking intersecting Lorenz curves," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 33(2), pages 235-259, August.
    3. Ji-Won Park & Chae Un Kim, 2021. "Getting to a feasible income equality," PLOS ONE, Public Library of Science, vol. 16(3), pages 1-16, March.
    4. Gayant, Jean-Pascal & Le Pape, Nicolas, 2017. "Increasing Nth degree inequality," Journal of Mathematical Economics, Elsevier, vol. 70(C), pages 185-189.
    5. Peter Lambert, 2008. "Tony Atkinson's 1973 manuscript “More on the measurement of inequality”," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 6(3), pages 275-276, September.
    6. Claudio Zoli, 2002. "Inverse stochastic dominance, inequality measurement and Gini indices," Journal of Economics, Springer, vol. 77(1), pages 119-161, December.
    7. Nicolas Gravel & Patrick Moyes, 2013. "Utilitarianism or welfarism: does it make a difference?," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 40(2), pages 529-551, February.
    8. James B. Davies & Nicole M. Fortin & Thomas Lemieux, 2017. "Wealth inequality: Theory, measurement and decomposition," Canadian Journal of Economics, Canadian Economics Association, vol. 50(5), pages 1224-1261, December.
    9. Stephen P. Jenkins & John Micklewright, 2007. "New Directions in the Analysis of Inequality and Poverty," Discussion Papers of DIW Berlin 700, DIW Berlin, German Institute for Economic Research.
    10. Michael Hoy & Brennan Thompson & Buhong Zheng, 2012. "Empirical issues in lifetime poverty measurement," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 10(2), pages 163-189, June.
    11. Chiou, Jong-Rong, 1996. "A dominance evaluation of Taiwan's official income distribution statistics, 1976-1992," China Economic Review, Elsevier, vol. 7(1), pages 57-75.
    12. Yoram Amiel & Frank A Cowell, 2001. "Risk and Inequality Perceptions," STICERD - Distributional Analysis Research Programme Papers 55, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    13. Rachel Loquet & Jerry Rafaliarison & Alain Trannoy, 1993. "L'évolution du caractère égalitaire du prélèvement fiscalo-social sous la cinquième République : un complément," Économie et Prévision, Programme National Persée, vol. 110(4), pages 81-104.
    14. Rolf Aaberge & Magne Mogstad, 2011. "Robust inequality comparisons," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 9(3), pages 353-371, September.
    15. Davies, James B. & Hoy, Michael, 2002. "Flat rate taxes and inequality measurement," Journal of Public Economics, Elsevier, vol. 84(1), pages 33-46, April.
    16. Casilda Lasso de la Vega & Ana Urrutia, 2008. "The ‘Extended’ Atkinson family: The class of multiplicatively decomposable inequality measures, and some new graphical procedures for analysts," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 6(2), pages 211-225, June.
    17. Hoy, Michael & Zheng, Buhong, 2011. "Measuring lifetime poverty," Journal of Economic Theory, Elsevier, vol. 146(6), pages 2544-2562.
    18. W. Henry Chiu, 2021. "Intersecting Lorenz curves and aversion to inverse downside inequality," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 56(3), pages 487-508, April.
    19. Francesco Andreoli & Claudio Zoli, 2020. "From unidimensional to multidimensional inequality: a review," METRON, Springer;Sapienza Università di Roma, vol. 78(1), pages 5-42, April.
    20. Buhong Zheng, 2018. "Almost Lorenz dominance," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 51(1), pages 51-63, June.

    More about this item

    Keywords

    welfare testing; inequality dominance; dominance testing;
    All these keywords.

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C46 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Specific Distributions
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:qed:wpaper:1484. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Mark Babcock (email available below). General contact details of provider: https://edirc.repec.org/data/qedquca.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.