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Multiple Adjusted Quantiles

2023-05-10 · Christopher P. Chambers, Alan D. Miller

We cardinally and ordinally rank distribution functions (CDFs). We present a new class of statistics, maximal adjusted quantiles, and show that a statistic is invariant with respect to cardinal shifts, preserves least upper bounds with respect to the first order stochastic dominance relation, and is lower semicontinuous if and only if it is a maximal adjusted quantile. A dual result is provided, as are ordinal results. Preservation of least upper bounds is given several interpretations, including one that relates to changes in tax brackets, and one that relates to valuing options composed of two assets.

📄 PDF Abstract BibTeX arXiv:2305.06354

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