Chapter 8 Testing for mobility dominance

Studies in Applied Welfare Analysis: Papers from the Third ECINEQ Meeting

ISBN: 978-0-85724-145-0, eISBN: 978-0-85724-146-7

ISSN: 1049-2585

Publication date: 26 August 2010

Abstract

This chapter proposes tests for stochastic dominance in mobility based on the empirical likelihood ratio. Two views of mobility are considered, either based on measures of absolute mobility or based on transition matrices. First-order and second-order dominance conditions in mobility are first derived, followed by the derivation of statistical inferences techniques to test a null hypothesis of nondominance against an alternative of mobility dominance. An empirical analysis, based on the US Panel Study of Income Dynamics (PSID), is performed by comparing four income mobility periods ranging from 1970 to 1990.

Citation

Maweki Batana, Y. and Duclos, J. (2010), "Chapter 8 Testing for mobility dominance", Bishop, J. (Ed.) Studies in Applied Welfare Analysis: Papers from the Third ECINEQ Meeting (Research on Economic Inequality, Vol. 18), Emerald Group Publishing Limited, Bingley, pp. 173-195. https://doi.org/10.1108/S1049-2585(2010)0000018011

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Emerald Group Publishing Limited

Copyright © 2010, Emerald Group Publishing Limited

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