Copula-based Measurement of Dependence Between Dimensions of Well-being
AbstractWell-being consists of many dimensions such as income, health and education. A society exhibits greater dependence between its dimensions of well-being when the positions of the individuals in the different dimensions are more aligned or correlated. Differences in dependence may lead to very different societies, even when the dimension-wise distributions are identical. I propose to use a copula-based frame-work to order societies with respect to their dependence. A class of measures of dependence is derived to which the multidimensional rank correlation coefficient be- longs. I illustrate the usefulness of the approach by showing that Russian dependence between three dimensions of well-being has increased significantly between 1995 and 2003. Unfortunately, the aspect of dependence is missed by all composite well-being measures based on dimension-specific summary statistics such as the popular Human Development Index (HDI)
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Bibliographic InfoPaper provided by HEDG, c/o Department of Economics, University of York in its series Health, Econometrics and Data Group (HEDG) Working Papers with number 09/32.
Date of creation: Dec 2009
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- Decancq, Koen, 2009. "Copula-based measurement of dependence between dimensions of well-being," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/253173, Katholieke Universiteit Leuven.
- Koen DECANCQ, 2009. "Copula-based measurement of dependence between dimensions of well-being," Center for Economic Studies - Discussion papers ces09.24, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- I31 - Health, Education, and Welfare - - Welfare and Poverty - - - General Welfare
- O50 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - General
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