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Income and Consumption Inequality in the Philippines: A Stochastic Dominance Analysis of Household Unit Records

Author

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  • Valenzuela, Maria Rebecca

    (Asian Development Bank Institute)

  • Wong, Wing-Keung

    (Asian Development Bank Institute)

  • Zhen, Zhu Zhen

    (Asian Development Bank Institute)

Abstract

In this paper, we employ stochastic dominance (SD) analysis on household unit records to measure relative welfare levels and investigate sources of inequality in the Philippines from 2000 to 2012. Using SD techniques developed in Chow, Valenzuela, and Wong (2016), we test for richness and poorness in the population across various social, economic, and demographic dimensions. Our SD composition approach and application of tests showed higher and improved relative welfare levels exist for urban, non-agricultural households, and that, compared with wages and business income, other sources of income have grown in importance in narrowing welfare gaps over time. We also found that the gender of household head and educational attainments matter for welfare outcomes. In terms of age, we found high concentrations of poor income units among the youngest cohort (aged 30 and under), and high concentrations of richer income units in the older, over-60 cohort. These results help explain persistently high levels of income inequality observed in the Philippine economy.

Suggested Citation

  • Valenzuela, Maria Rebecca & Wong, Wing-Keung & Zhen, Zhu Zhen, 2017. "Income and Consumption Inequality in the Philippines: A Stochastic Dominance Analysis of Household Unit Records," ADBI Working Papers 662, Asian Development Bank Institute.
    • Handle: RePEc:ris:adbiwp:0662
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    References listed on IDEAS

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    Cited by:

    1. Son, Hyun, 2022. "The Distributional Impacts of Fiscal Policy: The Case of the Philippines," ADB Economics Working Paper Series 662, Asian Development Bank.

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    More about this item

    Keywords

    income distribution; expenditure distribution; stochastic dominance; inequality;
    All these keywords.

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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