Welfare, inequality and poverty analysis with rtip: An approach based on stochastic dominance

Abstract

Disparities in economic welfare, inequality and poverty across and within countries are of great interest to sociologists, economists, researchers, social organizations and political scientists. Information about these topics is commonly based on surveys. We present a package called rtip that implements techniques based on stochastic dominance to make unambiguous comparisons, in terms of welfare, poverty and inequality, among income distributions. Besides providing point estimates and confidence intervals for the most commonly used indicators of these characteristics, the package rtip estimates the usual Lorenz curve, the generalized Lorenz curve, the TIP (Three I’s of Poverty) curve and allows to test statistically whether one curve is dominated by another.