Testing for stochastic dominance up to a common relative poverty line
Research output: Contribution to journal › Article › peer-review
Although a wide array of stochastic dominance tests exist for poverty measurement and identification, they assume the income distributions have independent poverty lines or a common absolute (fixed) poverty line. We propose a stochastic dominance test for comparing income distributions up to a common relative poverty line (i.e., some fraction of the pooled median). A Monte Carlo study demonstrates its superior performance over existing methods in terms of power. The test is then applied to some Canadian household survey data for illustration.
|Number of pages||9|
|Publication status||Published - 11 Feb 2020|
- Testing for Stochastic Dominance
Final published version, 275 KB, PDF document
Licence: CC BY