Chuang O.-C.Kuan C.-M.CHUNG-MING KUAN2019-07-222019-07-22201703044076https://scholars.lib.ntu.edu.tw/handle/123456789/414413Central dominance (CD) introduced in Gollier (1995, Journal of Economic Theory) is a risk concept that differs from stochastic dominance (SD) in an important way. In particular, CD implies a deterministic comparative static of a change in decision when risk changes, but SD does not have such an implication. In this paper, we propose the first test of central dominance, which amounts to checking a functional inequality. We derive the asymptotic distribution of a lower bound of the proposed test and suggest a bootstrap procedure to compute the critical values. We also conduct simulations to evaluate the performance of this test. Our empirical study finds clear evidence of CD relations between the S&P 500 index return distributions during 2001¡V2013 and results in unambiguous implications for investment decisions. ? 2016 Elsevier B.V.Central dominanceContact setFunctional inequalityPortfolio selectionStochastic dominance[SDGs]SDG10Investments; Stochastic systems; Asymptotic distributions; Central dominance; Comparative statics; Empirical studies; Functional inequalities; Investment decisions; Portfolio selection; Stochastic Dominance; Economicsjournal article10.1016/j.jeconom.2016.07.0082-s2.0-85028255696https://www.scopus.com/inward/record.uri?eid=2-s2.0-85028255696&doi=10.1016%2fj.jeconom.2016.07.008&partnerID=40&md5=1180228c14b7671fd5c4e4980aaf56b5