Stochastic Dominance Analysis for the Study of Multidimensional Well-being

Instructor: Gaston Yalonetzky, Research Officer, OPHI

Class Objectives:

Introduction to stochastic dominance analysis. What is it useful for? Different orders of stochastic dominance. Unidimensional versus multidimensional.
Multidimensional dominance criteria: Atkinson and Bourguignon (1982) generalized by Crawford (2005); and Duclos et. al. (2006).
Statistical inference techniques: Crawford (2005) and Duclos et. al. (2006). Emphasis on Crawford (2005).

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Stochastic Dominance Part 1
Stochastic Dominance Part 2

Problems

Answer Key (XLS)
Answer Key (PDF)

Reading List
Basic Readings:
ATKINSON, A.B and F. BOURGUIGNON (1982), “The comparison of multidimensioned distributions of economic status”, Review of Economic Studies, 49(2): 183-201.
CRAWFORD, I. (2005), “A nonparametric test of stochastic dominance in multivariate distributions”, IFS, Mimeo.
DUCLOS, J-Y., SAHN, D and S. YOUNGER (2006), “Robust Multidimensional Poverty Comparisons”, The Economic Journal. 116(514): 943-68.

Further readings:
FIELDS, G. (2001), Distribution and Development: A New Look at the Developing World, MIT Press.
ANDERSON, G. (1996), ‘Nonparametric tests of stochastic dominance in income distributions’, Econometrica, 64(5): 1183-1193.
DAVIDSON, R. and J. DUCLOS (2000), “Statistical inference for stochastic dominance and for the measurement of poverty and inequality”, Econometrica, 68(6): 1435-65.

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