Stochastic Dominance and Demographic Policy Evaluation: A Critique

Juan Cordoba and Xiying Liu
Additional contact information
Xiying Liu: Economics and Management School of Wuhan University

JODE - Journal of Demographic Economics, 2016, vol. 82, issue 1, 111-138

Abstract: Stochastic dominance (SD) is commonly used to rank income distributions and assess social policies. The literature argues that SD is a robust criterion for policy evaluation because it requires minimal knowledge of the social welfare function. We argue that, on the contrary, SD is not a robust criterion. We do this by carefully introducing microfoundations into a model by Chu and Koo (1990) who use SD to provide support to family-planning programs aiming at reducing the fertility of the poor. We show that fertility restrictions are generally detrimental for both individual and social welfare in spite of the fact that SD holds. Our findings are an application of the Lucas’ Critique.

Keywords: Fertility; Children; Welfare; Demographic policies; One child policy; Income distribution; Stochastic dominance (search for similar items in EconPapers)
JEL-codes: D31 D63 I32 J13 (search for similar items in EconPapers)
Date: 2016-03-01
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://dx.doi.org/10.1017/dem.2016.1 (application/pdf)

Related works:
Journal Article: STOCHASTIC DOMINANCE AND DEMOGRAPHIC POLICY EVALUATION: A CRITIQUE (2016)
Working Paper: Stochastic dominance and demographic policy evaluation: a critique (2016)
Working Paper: Stochastic Dominance and Demographic Policy Evaluation: A Critique (2013)
Working Paper: Stochastic dominance and demographic policy evaluation: a critique (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvde:v:82:y:2016:i:1:p:111-138

Access Statistics for this article

More articles in JODE - Journal of Demographic Economics from Cambridge University Press Place Montesquieu 3, 1348 Louvain-la-Neuve (Belgium). Contact information at EDIRC.
Bibliographic data for series maintained by Sebastien SCHILLINGS ().