Partial Multidimensional Inequality Orderings
Laval University; Institute for the Study of Labor (IZA)
David E. Sahn
Cornell University - Food and Nutrition Policy Program
Stephen D. Younger
Ithaca College - Department of Economics
February 9, 2010
CIRPEE Working Paper 10-03
The paper investigates how comparisons of multivariate inequality can be made robust to varying the intensity of focus on the share of the population that are more relatively deprived. It follows the dominance approach to making inequality comparisons, as developed for instance by Atkinson (1970), Foster and Shorrocks (1988) and Formby, Smith, and Zheng (1999) in the unidimensional context, and Atkinson and Bourguignon (1982) in the multidimensional context. By focusing on those below a multidimensional inequality “frontier”, we are able to reconcile the literature on multivariate relative poverty and multivariate inequality. Some existing approaches to multivariate inequality actually reduce the distributional analysis to a univariate problem, either by using a utility function first to aggregate an individual’s multiple dimensions of well-being, or by applying a univariate inequality analysis to each dimension independently. One of our innovations is that unlike previous approaches, the distribution of relative well-being in one dimension is allowed to affect how other dimensions influence overall inequality. We apply our approach to data from India and Mexico using monetary and non-monetary indicators of well-being.
Number of Pages in PDF File: 44
Keywords: Inequality, multidimensional comparisons, stochastic dominance
JEL Classification: D3, I3working papers series
Date posted: February 11, 2010
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