Poverty, Inequality and Stochastic Dominance, Theory and Practice: Illustration with Burkina Faso Surveys

Abstract

In this paper we provide a set of rules that can be used to check poverty or inequality dominance using discrete data. Existing theoretical rules assumes continuity in incomes or in percentiles of population. In reality, with the form of household surveys, this continuity does not exist. However, the said discontinuity can be exploited in testing the stochastic dominance. Moreover, in this paper, we propose the stochastic dominance conditions that take into account the statistical robustness in testing the stochastic dominance. Findings of this paper are illustrated using the Burkina Faso's household surveys for the years of 1994 and 1998.