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A Stochastic Dominance Approach to Evaluating Pro-Poor Growth—An Application to the Spanish Case

Author

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  • Ismael Ahamdanech

    (Department of Economics, University of Alcalá, 28802 Alcalá de Henares, Spain)

  • Carmelo García-Pérez

    (Department of Economics, University of Alcalá, 28802 Alcalá de Henares, Spain)

  • Mercedes Prieto-Alaiz

    (Department of Applied Economics, University of Valladolid, 47011 Valladolid, Spain)

Abstract

In this paper, we analyze, in a novel way, the nature of economic growth in Spain after the Great Recession, in relation to its effect on poverty reduction. We use a statistical test to analyze the pro-poorness nature of economic growth using a stochastic dominance approach, not used in this context so far. We decompose changes in the difference in generalized Lorenz ordinates into a growth effect and an inequality effect and apply this to formal Spanish income data statistical tests based on dominance methods. We found that growth was pro-poor in Spain as a whole between 2013 and 2017. As regards regional growth effects, we conclude that growth was weakly pro-poor in seven of Spain’s 17 regions, it was neither pro-poor nor anti-poor in nine regions, and only weakly anti-poor in one region.

Suggested Citation

  • Ismael Ahamdanech & Carmelo García-Pérez & Mercedes Prieto-Alaiz, 2020. "A Stochastic Dominance Approach to Evaluating Pro-Poor Growth—An Application to the Spanish Case," Sustainability, MDPI, vol. 12(5), pages 1-16, February.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:5:p:1728-:d:325092
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    References listed on IDEAS

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