The estimation of welfare levels of a cardinal utility function
In order to measure an individual's welfare function of income, WFI [Van Praag (1968, 1971)], the individual is confronted with various welfare levels and asked to associate income levels with them. The welfare levels are given as verbal qualifications like ‘good’, ‘sufficient’, ‘bad’, etc. It is assumed that these verbal qualifications correspond to intervals of equal length of the range of the WFI. Here we want to test this assumption. A first principal component model is applied. The intervals of the range of the WFI associated with the verbal qualifications are estimated and a test of their equality is performed.
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- Van Praag, Bernard, 1971.
"The welfare function of income in Belgium: An empirical investigation,"
European Economic Review,
Elsevier, vol. 2(3), pages 337-369.
- Van Praag, Bernard, 1971. "The welfare function of income in Belgium: An empirical investigation," European Economic Review, Elsevier, vol. 11(3), pages 337-369.
- Kapteyn, Arie & Wansbeek, Tom & Buyze, Jeannine, 1979. "Maximizing or Satisficing?," The Review of Economics and Statistics, MIT Press, vol. 61(4), pages 549-63, November.
- repec:dau:papers:123456789/13005 is not listed on IDEAS
- Laffargue, Jean-Pierre, 1977. "Nonlinear models of analysis of variance," Journal of Econometrics, Elsevier, vol. 5(3), pages 347-363, May.
- Kapteyn, Arie & Wansbeek, Tom & Buyze, Jeannine, 1980.
"The dynamics of preference formation,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 1(2), pages 123-157, June.
- Van Praag, Bernard M. S. & Kapteyn, Arie, 1973. "Further evidence on the individual welfare function of income: An empirical investigatiion in The Netherlands," European Economic Review, Elsevier, vol. 4(1), pages 33-62, April.
- Kapteyn, Arie & Van Herwaarden, Floor G., 1980. "Interdependent welfare functions and optimal income distribution," Journal of Public Economics, Elsevier, vol. 14(3), pages 375-397, December.
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