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Distributional Dominance with Dirty Data

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  • Frank A Cowell
  • Maria-Pia Victoria-Feser

Abstract

Distributional dominance criteria are commonly applied to draw welfare inferences about comparisons, but conclusions drawn from empirical implementations of dominance criteria may be influenced by data contamination. We examine a non-parametric approach to refining Lorenz-type comparisons and apply the technique to two important examples from the LIS data-base.

Suggested Citation

  • Frank A Cowell & Maria-Pia Victoria-Feser, 2001. "Distributional Dominance with Dirty Data," STICERD - Distributional Analysis Research Programme Papers 51, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    • Handle: RePEc:cep:stidar:51
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    References listed on IDEAS

    as
    1. Moyes, Patrick, 1987. "A new concept of Lorenz domination," Economics Letters, Elsevier, vol. 23(2), pages 203-207.
    2. Amiel, Yoram & Cowell, Frank, 1994. "Monotonicity, dominance and the Pareto principle," Economics Letters, Elsevier, vol. 45(4), pages 447-450, August.
    3. Timothy Smeeding & Gunther Schmaus & Brigitte Buhmann & Lee Rainwater, 1988. "Equivalence Scales, Well-Being, Inequality and Poverty: Sensitivity Estimates Across Ten Countries Using the LIS Database," LIS Working papers 17, LIS Cross-National Data Center in Luxembourg.
    4. Cowell, Frank A & Victoria-Feser, Maria-Pia, 1996. "Robustness Properties of Inequality Measures," Econometrica, Econometric Society, vol. 64(1), pages 77-101, January.
    5. Frank A. Cowell & Maria-Pia Victoria-Feser, 2002. "Welfare Rankings in the Presence of Contaminated Data," Econometrica, Econometric Society, vol. 70(3), pages 1221-1233, May.
    6. Frank A Cowell & Maria-Pia Victoria-Feser, 1999. "Statistical Inference for Welfare under Complete and Incomplete Information," STICERD - Distributional Analysis Research Programme Papers 47, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    7. Bishop, John A. & Formby, John P. & Thistle, Paul D., 1991. "Rank dominance and international comparisons of income distributions," European Economic Review, Elsevier, vol. 35(7), pages 1399-1409, October.
    8. Gottschalk, Peter & Smeeding, Timothy M., 2000. "Empirical evidence on income inequality in industrialized countries," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 5, pages 261-307, Elsevier.
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    12. Ben-Horim, Moshe, 1990. "Stochastic Dominance and Truncated Sample Data," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 13(2), pages 105-116, Summer.
    13. Brigitte Buhmann & Lee Rainwater & Guenther Schmaus & Timothy M. Smeeding, 1988. "Equivalence Scales, Well‐Being, Inequality, And Poverty: Sensitivity Estimates Across Ten Countries Using The Luxembourg Income Study (Lis) Database," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 34(2), pages 115-142, June.
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    17. van Praag, Bernard M S & Hagenaars, Aldi J M & van Eck, Wim, 1983. "The Influence of Classification and Observation Errors on the Measurement of Income Inequality," Econometrica, Econometric Society, vol. 51(4), pages 1093-1108, July.
    18. Coulter, Fiona A E & Cowell, Frank A & Jenkins, Stephen P, 1992. "Equivalence Scale Relativities and the Extent of Inequality and Poverty," Economic Journal, Royal Economic Society, vol. 102(414), pages 1067-1082, September.
    19. Rubin Saposnik, 1983. "On evaluating income distributions: Rank dominance, the Suppes-Sen grading principle of justice, and Pareto optimality," Public Choice, Springer, vol. 40(3), pages 329-336, January.
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    22. Frank A. Cowell, 1984. "The Structure Of American Income Inequality," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 30(3), pages 351-375, September.
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    Citations

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    Cited by:

    1. Cowell, Frank & Litchfield, Julie & Mercader-Prats, Magda, 1999. "Income inequality comparisons with dirty data: the UK and Spain during the 1980s," LSE Research Online Documents on Economics 2240, London School of Economics and Political Science, LSE Library.
    2. Frank A Cowell & Maria-Pia Victoria-Feser, 2001. "Robust Lorenz Curves: A Semiparametric Approach," STICERD - Distributional Analysis Research Programme Papers 50, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    3. Lubrano, Michel & Protopopescu, Camelia, 2004. "Density inference for ranking European research systems in the field of economics," Journal of Econometrics, Elsevier, vol. 123(2), pages 345-369, December.
    4. Frank Cowell & Maria-Pia Victoria-Feser, 2003. "Distribution-Free Inference for Welfare Indices under Complete and Incomplete Information," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 1(3), pages 191-219, December.
    5. Josep Oliver Alonso & Xavier Ramos & José Luis Raymond-Bara, 2001. "Recent trends in Spanish Income Distribution: A Robust Picture of Falling Income Inequality," Working Papers wp0107, Department of Applied Economics at Universitat Autonoma of Barcelona.

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    More about this item

    Keywords

    Distributional dominance; Lorenz curve; robustness.;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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