An environmental degradation index based on stochastic dominance

A New Stochastic Dominance Degree Based on Almost Stochastic Dominance and Its Application in Decision Making

Traditional stochastic dominance rules are so strict and qualitative conditions that generally a stochastic dominance relation between two alternatives does not exist. To solve the problem, we firstly supplement the definitions of almost stochastic dominance (ASD). Then, we propose a new definition of stochastic dominance degree (SDD) that is based on the idea of ASD. The new definition takes b...

Relationship between Environmental Quality and Economic Growth in Developing Countries (based on Environmental Performance Index)

In order to evaluate the development levels of countries, economic growth along with environmental quality account for important indices nowadays. The impacts of environmental quality (based on environmental performance index), the direct foreign investment, and trade openness on economic growth in selected developing countries have been scrutinized in the present study. In the present study th...

Decision criteria in risk analysis : an application of stochastic dominance with respect to a function

Efficiency of Cost-Averaging as an investment strategy - An analysis based on second order stochastic dominance

The long-lasting controversy on the usefulness of cost-averaging as an investment strategy is revived by the increasingly more aggressive marketing for long term saving plans with new intensity. Albrecht et al. (2002) illustrated using a shortfall risk based approach that cost-averaging may be an efficient strategy compared to simple buy-and-hold-strategies. The contribution of this paper is a ...

Portfolio Choice Based on Third-Degree Stochastic Dominance

We develop an optimization method for constructing investment portfolios that dominate a given benchmark portfolio in terms of third-degree stochastic dominance. Our approach relies on the properties of the semivariance function, a refinement of an existing ‘super-convex’ dominance condition and quadratic constrained programming. We apply our method to historical stock market data using an indu...