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Title:Testing for poverty dominance: an application to Canada PDF Logo
Authors:Chen, Wen-Hao
Duclos, Jean-Yves
Issue Date:2008
Series/Report no.:IZA discussion papers 3829
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.
Subjects:Stochastic dominance
empirical likelihood
Canada
income distribution
JEL:C12
Persistent Identifier of the first edition:urn:nbn:de:101:1-20081127581
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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