TY - JOUR
T1 - Posterior probabilities for Lorenz and Stochastic dominance of Australian income distributions
AU - Gunawan, David
AU - Griffiths, William E.
AU - Chotikapanich, Duangkamon
N1 - Funding Information:
The HILDA Project was initiated and is funded by the Australian Government Department of Social Services (DSS) and is managed by the Melbourne Institute of Applied Economic and Social Research (Melbourne Institute) (Watson & Wooden, 2012 ). The findings and views reported in this paper, however, are those of the authors alone and should not be attributed to either the DSS or the Melbourne Institute. 2
Publisher Copyright:
© 2021 Economic Society of Australia
Copyright:
Copyright 2021 Elsevier B.V., All rights reserved.
PY - 2021/12
Y1 - 2021/12
N2 - Using Household, Income and Labour Dynamics in Australia (HILDA) data for 2001, 2006, 2010, 2014 and 2017, we compute posterior probabilities for dominance for all pairwise comparisons of income distributions in these years. The dominance criteria considered are Lorenz dominance and first- and second-order stochastic dominance. The income distributions are estimated using an infinite mixture of gamma density functions, with posterior probabilities computed as the proportion of Markov chain Monte Carlo draws that satisfy the inequalities that define the dominance criteria. We find welfare improvements from 2001 to 2006 and qualified improvements from 2006 to the later three years. Evidence of an ordering between 2010, 2014 and 2017 cannot be established.
AB - Using Household, Income and Labour Dynamics in Australia (HILDA) data for 2001, 2006, 2010, 2014 and 2017, we compute posterior probabilities for dominance for all pairwise comparisons of income distributions in these years. The dominance criteria considered are Lorenz dominance and first- and second-order stochastic dominance. The income distributions are estimated using an infinite mixture of gamma density functions, with posterior probabilities computed as the proportion of Markov chain Monte Carlo draws that satisfy the inequalities that define the dominance criteria. We find welfare improvements from 2001 to 2006 and qualified improvements from 2006 to the later three years. Evidence of an ordering between 2010, 2014 and 2017 cannot be established.
UR - http://www.scopus.com/inward/record.url?scp=85113336718&partnerID=8YFLogxK
U2 - 10.1111/1475-4932.12628
DO - 10.1111/1475-4932.12628
M3 - Article
AN - SCOPUS:85113336718
SN - 0013-0249
VL - 97
SP - 504
EP - 524
JO - Economic Record
JF - Economic Record
IS - 319
ER -