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, July 2010

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

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

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

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

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

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

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 :

b

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

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 :

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

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

Does more affluence mean less poverty ?

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