Testing for Poverty Dominance: An Application to Canada

Wen-Hao Chen () and Jean-Yves Duclos

No 3829, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The paper proposes and applies statistical tests for poverty dominance that check for whether poverty comparisons can be made robustly over ranges of poverty lines and classes of poverty indices. This helps provide both normative and statistical confidence in establishing poverty rankings across distributions. The tests, which can take into account the complex sampling procedures that are typically used by statistical agencies to generate household-level surveys, are implemented using the Canadian Survey of Labour and Income Dynamics (SLID) for 1996, 1999 and 2002. Although the yearly cumulative distribution functions cross at the lower tails of the distributions, the more recent years tend to dominate earlier years for a relatively wide range of poverty lines. Failing to take into account SLID's sampling variability (as is sometimes done) can inflate significantly one's confidence in ranking poverty. Taking into account SLID's complex sampling design (as has not been done before) can also decrease substantially the range of poverty lines over which a poverty ranking can be inferred.

Keywords: empirical likelihood; stochastic dominance; income distribution; Canada (search for similar items in EconPapers)
JEL-codes: C12 C15 D31 D63 I30 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2008-11
New Economics Papers: this item is included in nep-ltv
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Published - published in: Canadian Journal of Economics / Revue canadienne d'économique, 2011, 44 (3), 781-803

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Related works:
Journal Article: Testing for poverty dominance: an application to Canada (2011)
Journal Article: Testing for poverty dominance: an application to Canada (2011)
Working Paper: Testing for Poverty Dominance: An Application to Canada (2009)
Working Paper: Testing for poverty dominance: an application to Canada (2009)
Working Paper: Testing for Poverty Dominance: an Application to Canada (2008)
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