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ELITISM AND STOCHASTIC DOMINANCE Stephen BAZEN (GREQAM, Université d’Aix-Marseille II) Patrick MOYES (GREThA, Université de Bordeaux IV) Presentation at the Tenth SSCW International Meeting, Moscow, 21-24 July 2010

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Comparison of distributions Risk : distribution of returns Inequality: distribution of income (earnings, wealth,…) In general, emphasis on progressive transfers

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Elitism x is obtained from z by a regressive transfer Progressive transfer - Academic performance - Affluence

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Welfare function for distribution h(.) : Comparison of two distributions in terms of social welfare Stochastic dominance

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Stochastic dominance – standard application First order stochastic dominance Second order stochastic dominance

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First order stochastic dominance (F dominates G) Second order stochastic dominance (F dominates G)

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Elitism and stochastic dominance Performance : density of individuals’ publication scores value function Assumption 1 : An additional publication increases performance

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Assumption 2 : A regressive transfer of publication scores increases performance Convexity of the value function rather than concavity in the standard case Criterion for ranking departments by performance :

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b

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If distribution F stochastically dominates G in terms of the survival function then

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Assumption 3 : A regressive transfer of publication scores of given size increases perfomance more at the higher end of the scale than at the lower end Criterion for ranking departments by performance :

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Tilburg EssexToulouse dominates all departments except Louvain dominate: LSE Stockholm U. Nottingham Second order stochastic dominance UCL No dominance over : Essex, Cantab, Erasmus dominates: LSE Stockholm U. Amsterdam

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Stockholm School of Economics dominates: Warwick York Maastricht Autonoma Barcelona Bonn London Business School Amsterdam dominates: Oxon Stockholm School of Economics dominates: Free University of Amsterdam Amsterdam Nottingham Tilburg and UCL dominate: Nottingham Louvain dominates: Free University of Amsterdam Amsterdam

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Does more affluence mean less poverty ?

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Ranked by both criteria - an example (i) Generalised Lorenz dominance : progressive transferincrement (ii) Reverse Generalised Lorenz dominance : regressive transferincrement

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