Welfare Judgements in the Presence Contaminated Data
London School of Economics & Political Science (LSE) - Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)
University of Geneva - HEC
LSE STICERD Research Paper No. 13
The economic analysis of income distribution and related topics makes extensive use of dominance criteria to draw inferences about welfare comparisons. However it is possible that - just as some inequality statistics can be very sensitive to extreme values - conclusions drawn from empirical implementations of dominance criteria may also be influenced by data contamination. We show the conditions under which this may occur and propose empirical methods to work round the problem.
Date posted: February 21, 2008