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Distribution-Free Statistical Inference for Inequality Dominance with Crossing Lorenz Curves

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  • Charles M. Beach
  • Russell Davidson
  • George A. Slotsve

Abstract

Distribution-free techniques of statistical inference are developed for the cumulative coefficients of variation of an income distribution, thus allowing one to test for inequality dominance when Lorenz curves cross. The full covariance structure of the cumulative sample means and variances is worked out. As an illustration, the procedures are applied to the 1984 and 1990 earnings distributions of male paid workers in the United States, and it is found that the 1990 distribution was significantly less unequal than the 1984 distribution.

Suggested Citation

  • 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.
    • Handle: RePEc:qed:wpaper:912
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    File URL: http://qed.econ.queensu.ca/working_papers/papers/qed_wp_912.pdf
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    Cited by:

    1. Beach, Charles M. & Chaykowski, Richard P. & Slotsve, George A., 1997. "Inequality and polarization of male earnings in the United States, 1968-1990," The North American Journal of Economics and Finance, Elsevier, vol. 8(2), pages 135-151.
    2. Rebecca Valenzuela & Hooi Hooi Lean, 2007. "Stochastic Dominance Analysis Of Australian Income Distributions," Monash Economics Working Papers 21-07, Monash University, Department of Economics.
    3. Russell Davidson & Jean-Yves Duclos, 1997. "Statistical Inference for the Measurement of the Incidence of Taxes and Transfers," Econometrica, Econometric Society, vol. 65(6), pages 1453-1466, November.
    4. Ian Rongve, 1997. "Statistical inference for poverty indices with fixed poverty lines," Applied Economics, Taylor & Francis Journals, vol. 29(3), pages 387-392.
    5. Charles Beach, 2022. "Better Off or More Apart? Empirically Testing Welfare and Inequality Dominance Criteria," Working Paper 1484, Economics Department, Queen's University.
    6. 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.

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