Dominance testing of transfers in Romania

In this paper we compare the progressivity of different government transfer s made to households in Romania. We use distribution free standard errors t o examine the difference between concentration curves that may be correlate d, and thereafter employ statistical tests that take into account the covar iance matrix for the ordinate estimates. In addition, we estimate extended Gini coefficients for the same transfers to check their consistency with th e tests of inequality dominance. The results show that almost all transfer payments in Romania are progressive, and that they have an important effect on the distribution of income. Rankings among different transfer payments are, however, not robust. In particular, sensitivity analysis using differe nt household equivalence scales indicates that many results are not consist ent across scales, and that lower size elasticities contribute to changes i n ranking of Ginis and loss of statistical significance in dominance tests.