Disparities in socio-economic outcomes: some positive propositions and their normative implications
Demographic disparities between the rates of occurrence of an adverse economic outcome can be observed to be increasing even as general social improvements supposedly lead towards the elimination of the adverse outcome in question. Scanlan (Chance 19(2):47–51, 2006) noticed this tendency and developed a ‘heuristic rule’ to explain it. In this paper, we explore the issue analytically, providing a criterion from stochastic ordering theory under which one of two demographic groups can be considered disadvantaged and the other advantaged, and showing that Scanlan’s heuristic obtains as a rigorous finding in such cases. Normative implications and appropriate social policy are discussed.
JEL ClassificationD63 I13 I31 I32
The authors thank two anonymous referees of this journal for their insightful comments on an earlier draft, which have enabled us to make considerable improvements in our paper.
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