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Contructing A Broader Measure Of Welfare Incorporating The Access To Public Goods

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  • Felipe Diniz
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    Abstract

    This paper attempts to construct a broader measure of welfare that takes in account the access people have to some public goods. If the data on household access to public goods and private assets is assumed to be the result of a maximization problem, a latent indirect utility level may be estimated by some factor model. In this paper the individual measure of welfare is constructed using Principal Component Analysis (PCA) in the ownership of private assets and the existence of public goods in the neighborhood the agent lives in. The resulting welfare distributions are used in different analysis: Calculate the treatment effect of having access to certain public goods; investigate the effects of public goods in poverty and inequality alleviation; development of an algorithm to locate public goods in order to maximize some social welfare function.

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    File URL: http://www.anpec.org.br/encontro2005/artigos/A05A045.pdf
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    Bibliographic Info

    Paper provided by ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics] in its series Anais do XXXIII Encontro Nacional de Economia [Proceedings of the 33th Brazilian Economics Meeting] with number 045.

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    Date of creation: 2005
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    Handle: RePEc:anp:en2005:045

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    1. Hyeok Jeong & Robert M. Townsend, 2003. "Growth and Inequality: Model Evaluation Based on an Estimation-Calibration Strategy," IEPR Working Papers 05.10, Institute of Economic Policy Research (IEPR).
    2. Carneiro, Pedro & Hansen, Karsten T. & Heckman, James J., 2003. "Estimating Distributions of Treatment Effects with an Application to the Returns to Schooling and Measurement of the Effects of Uncertainty on College Choice," IZA Discussion Papers 767, Institute for the Study of Labor (IZA).
    3. Aaron, Henry & McGuire, Martin, 1970. "Public Goods and Income Distribution," Econometrica, Econometric Society, vol. 38(6), pages 907-20, November.
    4. Maital, Shlomo, 1973. "Public Goods and Income Distribution: Some Further Results," Econometrica, Econometric Society, vol. 41(3), pages 561-68, May.
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