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Merging populations, stochastic dominance and Lorenz curves

Author

Listed:
  • O. Stark

    (Harvard University
    Bar-Ilan University)

  • S. Yitzhaki

    (The Hebrew University of Jerusalem)

Abstract

In typical comparisons of inequality the condition that the means of the distributions are equal is hardly met. In these cases, the widely used Lorenz curves non-intersection criterion is neither a necessary nor sufficient condition for stochastic dominance. It is suggested to replace the Lorenz curves non-intersection criterion with an absolute Lorenz curves non-intersection criterion. The implications of adopting this criterion are discussed in the context of fixed populations and changing populations.

Suggested Citation

  • O. Stark & S. Yitzhaki, 1988. "Merging populations, stochastic dominance and Lorenz curves," Journal of Population Economics, Springer;European Society for Population Economics, vol. 1(2), pages 157-161, October.
    • Handle: RePEc:spr:jopoec:v:1:y:1988:i:2:d:10.1007_bf00163888
    DOI: 10.1007/BF00163888
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    References listed on IDEAS

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    1. Gary S. Fields, 1979. "A Welfare Economic Approach to Growth and Distribution in the Dual Economy," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 93(3), pages 325-353.
    2. Yitzhaki, Shlomo, 1983. "On an Extension of the Gini Inequality Index," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 24(3), pages 617-628, October.
    3. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    4. Lam, David, 1986. "The Dynamics of Population Growth, Differential Fertility, and Inequality," American Economic Review, American Economic Association, vol. 76(5), pages 1103-1116, December.
    5. Hadar, Josef & Russell, William R, 1969. "Rules for Ordering Uncertain Prospects," American Economic Review, American Economic Association, vol. 59(1), pages 25-34, March.
    6. Yitzhaki, Shlomo, 1982. "Stochastic Dominance, Mean Variance, and Gini's Mean Difference," American Economic Review, American Economic Association, vol. 72(1), pages 178-185, March.
    7. repec:bla:econom:v:50:y:1983:i:197:p:3-17 is not listed on IDEAS
    8. Rothschild, Michael & Stiglitz, Joseph E., 1970. "Increasing risk: I. A definition," Journal of Economic Theory, Elsevier, vol. 2(3), pages 225-243, September.
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    Cited by:

    1. Sahrbacher, Amanda, 2012. "Impacts of CAP reforms on farm structures and performance disparities: An agent-based approach," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 65, number 65.
    2. Lidia Ceriani & Paolo Verme, 2022. "Population Changes and the Measurement of Inequality," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 162(2), pages 549-575, July.

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