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Stochastic Dominance Analysis Of Australian Income Distributions

Author

Listed:
  • Rebecca Valenzuela
  • Hooi Hooi Lean

Abstract

We apply stochastic dominance tests to investigate trends in inequality in Australia over the period 1983 to 1998. Results show significant levels of inequalities in the income and expenditure distributions for the population as a whole as well as within population groups. We further find that the impact of the government’s tax and transfer redistribution scheme varied greatly among the different demographic groups. After tax and transfers are made, significant gains in welfare levels were observed for migrant and single-parents households compared to their non-migrant and couple-parent counterparts respectively. In contrast, welfare levels of male-headed households continue to dominate those of female households post tax and that there is limited government capacity for closing the existing gap in incomes and expenditures among households without children.

Suggested Citation

  • Rebecca Valenzuela & Hooi Hooi Lean, 2007. "Stochastic Dominance Analysis Of Australian Income Distributions," Monash Economics Working Papers 21-07, Monash University, Department of Economics.
    • Handle: RePEc:mos:moswps:2007-21
    as

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    File URL: http://www.buseco.monash.edu.au/eco/research/papers/2007/2107stochasticvalenzuelalean.pdf
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    References listed on IDEAS

    as
    1. Garry F. Barreti & Tomas F. Crossley & Christopher Worswick, 2000. "Demographic Trends And Consumption Inequality In Australia Between 1975 And 1993," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 46(4), pages 437-456, December.
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    3. Ann Harding & Aggie Szukalska, 2000. "Trends in Child Poverty in Australia, 1982 to 1995–96," The Economic Record, The Economic Society of Australia, vol. 76(234), pages 236-254, September.
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    5. Esfandiar Maasoumi & Almas Heshmati, 2000. "Stochastic dominance amongst swedish income distributions," Econometric Reviews, Taylor & Francis Journals, vol. 19(3), pages 287-320.
    6. repec:bla:econom:v:50:y:1983:i:197:p:3-17 is not listed on IDEAS
    7. Ann Harding, 1997. "The Suffering Middle: Trends in Income Inequality in Australia, 1982 to 1993–94," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 30(4), pages 341-358, December.
    8. Garry F. Barrett & Thomas F. Crossley & Christopher Worswick, 2000. "Consumption and Income Inequality in Australia," The Economic Record, The Economic Society of Australia, vol. 76(233), pages 116-138, June.
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    10. Krishna Pendakur, 1998. "Changes In Canadian Family Income And Family Consumption Inequality Between 1978 And 1992," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 44(2), pages 259-282, June.
    11. Garry Barrett & Thomas Crossley & Christopher Worswick, 1999. "Demographic Trends and Consumption Inequality in Australia 1975-1993," CEPR Discussion Papers 403, Centre for Economic Policy Research, Research School of Economics, Australian National University.
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    More about this item

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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