Book Chapter

BAYESIAN ASSESSMENT OF LORENZ AND STOCHASTIC DOMINANCE IN INCOME DISTRIBUTIONS

Duangkamon Chotikapanich, William E Griffiths

DYNAMICS OF INEQUALITY AND POVERTY | Research on Economic Inequality | EMERALD GROUP PUBLISHING LIMITED | Published : 2006

Abstract

Hypothesis tests for dominance in income distributions has received considerable attention in recent literature. See, for example, Barrett and Donald (2003a, b), Davidson and Duclos (2000) and references therein. Such tests are useful for assessing progress towards eliminating poverty and for evaluating the effectiveness of various policy initiatives directed towards welfare improvement. To date the focus in the literature has been on sampling theory tests. Such tests can be set up in various ways, with dominance as the null or alternative hypothesis, and with dominance in either direction (X dominates Y or Y dominates X). The result of a test is expressed as rejection of, or failure to reje..

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