Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/119534
Authors: 
Aaberge, Rolf
Havnes, Tarjei
Mogstad, Magne
Year of Publication: 
2014
Series/Report no.: 
Memorandum, Department of Economics, University of Oslo 20/2014
Abstract: 
We propose a general framework to unambiguously compare distributions functions in an economically interpretable way. Our framework provides complete ranking of any set of distributions and money metric interpretation of the social welfare level of a dominating distribution as compared to a dominated distribution. We show the usefulness of our framework using two empirical applications; the first assesses the welfare implications of changes in household income distributions over the business cycle, while the second performs a social welfare comparison of the actual and counterfactual outcome distributions from a policy experiment.
Subjects: 
distribution functions
stochastic dominance
social welfare
inequality
JEL: 
D30
D63
I31
Document Type: 
Working Paper

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