Social welfare orderings: A life-cycle perspective

Ramses Hani Abul Naga

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)

Abstract

Life-cycle theories emphasize the fact that consumption is allocated intertemporally, on the basis of a long-term concept of resources that differs from household income. Because life-cycle income is unobserved, the distribution of this variable cannot be recovered. It is shown that, within a suitably defined class, a predictor of life-cycle income based on household income and expenditure entails a distribution dominated in a social welfare sense by the distribution of life-cycle incomes. A predictor constructed from socio-demographic variables induces a distribution that welfare-dominates the distribution of life-cycle incomes.

Original languageEnglish
Pages (from-to)497-514
Number of pages18
JournalEconomica
Volume72
Issue number287
Early online date19 Jul 2005
DOIs
Publication statusPublished - Aug 2005

Keywords

  • precautionary savings
  • income distributions
  • stochastic-dominance
  • consumption
  • inequality
  • household
  • poor
  • poverty
  • US

Cite this