Social Shock Sharing and Stochastic Dominance

Christophe Muller

Working Papers from HAL

Abstract: Since the seminal paper of Atkinson and Bourguignon (1982), little decisive progress has been achieved in developing empirically efficient stochastic dominance criteria for multidimensional social welfare analysis. By proposing new axioms of 'Social Shock Sharing', this paper provides new intuitive justifications to imposing sign restrictions on partial derivatives of individual von Neumann-Morgenstern utility functions. These new breakthrough findings are exploited to derive necessary and sufficient stochastic dominance criteria for multidimensional social welfare comparisons, up to the sixth order, at least. Equivalent results are derived in terms of multidimensional poverty conditions. Empirically powerful discriminatory criteria are obtained by combining all social shock sharing axioms up to some high order and by deriving a dimension reduction property. An application to Egypt at the beginning of the XXIst century demonstrates the practical substantial gain in discriminating power of the approach by revealing a unambiguous continual improvement in bivariate income-education social welfare over the studied period.

Keywords: multidimensional welfare; stochastic dominance; temperance; risk sharing (search for similar items in EconPapers)
Date: 2019-01
New Economics Papers: this item is included in nep-ara and nep-upt
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-02005735v1
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://shs.hal.science/halshs-02005735v1/document (application/pdf)

Related works:
Working Paper: Social Shock Sharing and Stochastic Dominance (2019)
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:hal:wpaper:halshs-02005735

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().