Scandinavian Working Papers in Economics

Discussion Papers of Business and Economics,
University of Southern Denmark, Department of Business and Economics

No 12/2015: Decomposing bivariate dominance for social welfare comparisons

Tina Gottschalk (), Troels Martin Range (), Peter Sudhölter () and Lars Peter Østerdal ()
Additional contact information
Tina Gottschalk: Department of Business and Economics, Postal: University of Southern Denmark, Campusvej 55, DK-5230 Odense M, Denmark
Troels Martin Range: Department of Business and Economics, Postal: University of Southern Denmark, Campusvej 55, DK-5230 Odense M, Denmark
Peter Sudhölter: Department of Business and Economics, Postal: University of Southern Denmark, Campusvej 55, DK-5230 Odense M, Denmark
Lars Peter Østerdal: Department of Business and Economics, Postal: University of Southern Denmark, Campusvej 55, DK-5230 Odense M, Denmark

Abstract: The lower orthant dominance relation is frequently used for multidimensional social welfare comparisons. Recently it has been shown that bivariate dominance can be characterized in terms of elementary mass transfer operations. We provide an algorithm which explicitly decomposes the mass transfers into welfare differences and inequality differences.

Keywords: Social welfare; lower orthant dominance; first order dominance; algorithm

JEL-codes: C63; D63; I31

14 pages, June 30, 2015

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