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

Channing Arndt; Roberta Distante; M. Azhar Hussain; Huong Pham Lan; Maimuna Ibraimo; Lars Peter  Østerdal

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

Channing Arndt, Roberta Distante, M. Azhar Hussain, Huong Pham Lan, Maimuna Ibraimo, Lars Peter Østerdal

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Abstract

We develop an ordinal method for making welfare comparisons between populations with multidimensional discrete well-being indicators observed at the micro level. The approach assumes that, for each well-being indicator, the levels can be ranked from worse to better; however, no assumptions are made about relative importance of any dimension nor about complementarity/substitutability relationships between dimensions. The method is based on the concept of multidimensional first order dominance. We introduce a rapid and reliable algorithm for empirically determining whether one population dominates another on the basis of available binary indicators by drawing upon linear programming theory. These approaches are applied to household survey data from Vietnam and Mozambique with a focus on child poverty comparisons
over time and between regions.

Original language	English
Publisher	Department of Economics, University of Copenhagen
Number of pages	23
Publication status	Published - Apr 2011

Series	University of Copenhagen. Institute of Economics. Discussion Papers (Online)
Number	13
Volume	2011
ISSN	1601-2461

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DP 11-13Submitted manuscript, 179 KB

Cite this

Arndt, C., Distante, R., Hussain, M. A., Pham Lan, H., Ibraimo, M., & Østerdal, L. P. (2011). Ordinal Welfare Comparisons with Multiple Discrete Indicators: A First Order Dominance Approach and Application to Child Poverty. Department of Economics, University of Copenhagen. University of Copenhagen. Institute of Economics. Discussion Papers (Online) Vol. 2011 No. 13

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