Transformations of Stochastic Orderings
Incomplete orderings of distributions are nowadays used routinely in the analysis of uncertainty, inequality, welfare and poverty. The popularity of these orderings - of which stochastic dominance and Lorenz dominance are the best known examples - is due to the fact that they distinguish those distributional rankings which are widely accepted from those which depend on personal value judgements, and are therefore less clear cut. In this respect, the use of incomplete orderings may be viewed as an attempt to mark the boundary between positive and normative economics.
KeywordsIncome Distribution Discrete Distribution Stochastic Dominance Lorenz Curve Stochastic Order
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