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WP/036 Ordinal Welfare Comparisons with Multiple Discrete Indicators:A First Order Dominance Approach and Application to Child Poverty

We develop an approach for making welfare comparisons between populations with multidimensional discrete well-being indicators observed at the micro level. The approach is rooted in the concept of multidimensional first order dominance. It assumes that, for each indicator, the levels can be ranked ordinally from worse to better, however no assumptions are made about relative importance of any dimension nor about complementarity/substitutability relationships between dimensions. We also introduce an efficient algorithm for determining dominance and employ a bootstrap approach that permits cardinal rankings of populations. These approaches are applied to household survey data from Vietnam and Mozambique.
Publisher:
UNU-WIDER
Series:
WIDER Working Paper
Volume:
2012/36
Title:
WP/036 Ordinal Welfare Comparisons with Multiple Discrete Indicators:A First Order Dominance Approach and Application to Child Poverty
Authors:
Channing Arndt, Roberta Distante, M. Azhar Hussain, Lars Peter Østerdal, Pham Lan Huong, Maimuna Ibraimo
Publication date:
April 2012
ISBN 13 Web:
978-92-9230-499-7
Copyright holder:
© UNU-WIDER
Copyright year:
2012
Keywords:
ordinal; welfare; multi-dimensional poverty measurement; first order dominance; Mozambique; Vietnam
JEL:
I32, D63, O10
Project:
Reconciling Africa’s Growth, Poverty and Inequality Trends
Sponsor:
UNU-WIDER gratefully acknowledges the financial contributions to the research programme by the governments of Denmark (Ministry of Foreign Affairs), Finland (Ministry for Foreign Affairs), Sweden (Swedish International Development Cooperation Agency—Sida), and the United Kingdom (Department for International Development).
Format:
online
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