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Almost Dominance: Inference and Application

Xiaojun Song, Zhenting Sun

arXiv 4 Dec 2023 · Econometrics · publishedEconometric Reviews (2025)

arXiv:2312.02288 · PDF · DOI · OpenAlex · Extracted main text

Abstract

This paper proposes a general framework for inference on three types of almost dominances: almost Lorenz dominance, almost inverse stochastic dominance, and almost stochastic dominance. We first generalize almost Lorenz dominance to almost upward and downward Lorenz dominances. We then provide a bootstrap inference procedure for the Lorenz dominance coefficients, which measure the degrees of almost Lorenz dominance. Furthermore, we propose almost upward and downward inverse stochastic dominances and provide inference on the inverse stochastic dominance coefficients. We also show that our results can easily be extended to almost stochastic dominance. Simulation studies demonstrate the finite sample properties of the proposed estimators and the bootstrap confidence intervals. This framework can be applied to economic analysis, particularly in the areas of social welfare, inequality, and decision making under uncertainty. As an empirical example, we apply the methods to the inequality growth in the United Kingdom and find evidence for almost upward inverse stochastic dominance.

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48
references
167
in-text mentions
53
distinct cited
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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Aaberge, R (2009) Ranking intersecting Lorenz curves0.95616488%
2Zheng, B (2018) Almost Lorenz dominance0.95014486%
3Sun, Z. and Beare, B. K (2021) Improved nonparametric bootstrap tests of Lorenz dominance self0.94419684%
4Barrett, G. F., Donald, S. G., and Bhattacharya, D (2014) Consistent nonparametric tests for Lorenz dominance0.8749367%
5Fang, Z. and Santos, A (2019) Inference on directionally differentiable functions0.79410350%
6Aaberge, R., Havnes, T., and Mogstad, M (2021) Ranking intersecting distribution functions0.76620445%
7Aaberge, R (2001) Axiomatic characterization of the Gini coefficient and Lorenz curve orderings0.7375260%
8Andrews, D. W (2000) Inconsistency of the bootstrap when a parameter is on the boundary of the parameter space0.64422100%
9Bickel, P. J., Götze, F., and van Zwet, W. R (2012) Resampling fewer than $n$ observations: Gains, losses, and remedies for losses0.64422100%
10Kaji, T (2019) Asymptotic theory of $L$-statistics and integrable empirical processes0.5853333%

Showing the top 10 of 53 scored citations.