Stochastic dominance and demographic policy evaluation: a critique

Thumbnail Image
Date
2013-04-14
Authors
Cordoba, Juan Carlos
Liu, Xiying
Major Professor
Advisor
Committee Member
Journal Title
Journal ISSN
Volume Title
Publisher
Authors
Person
Research Projects
Organizational Units
Organizational Unit
Journal Issue
Is Version Of
Versions
Series
Department
Economics
Abstract

Stochastic dominance (SD) is commonly used to rank income distribution and assess social policies. The literature argues that SD is a robust criterion for policy evaluation because it requires minimal knowledge of the social welfare function. We argue that, on the contrary, SD is not a robust criterion. We do this by carefully introducing microfoundations into a model by Chu and Koo (1990) who use SD to provide support to family-planning programs aiming at reducing the fertility of the poor. We show that fertility restrictions are generally detrimental for both individual and social welfare in spite of the fact that SD holds. Our findings are an application of the Lucas' Critique.

Comments
Description
Keywords
Citation
DOI
Source
Subject Categories
Copyright
Collections