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Global welfare comparisons

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  • Geir B. Asheim

Abstract

To provide a normative foundation for transfers between different economies, one needs information on their ‘per capita welfare.’ This paper considers various methods for doing this and reaches the following conclusions: (i) Such global welfare comparisons are more demanding than usually thought. (ii) The ranking of methods differs from that of local (over‐time) comparisons, with real comprehensive per capita NNP being the least impractical method. The lesson is that global welfare comparisons should be performed with great care. The comparisons must be made in local real prices calculated according to ‘purchasing‐power‐parity,’ where non‐traded environmental amenities play an important role. Pour fournir un fondement normatif aux transferts entre différentes économies, on a besoin de renseignements sur leurs niveaux de bien‐être per capita. Ce texte considère diverses méthodes pour ce faire et en arrive aux conclusions suivantes: (i) de telles comparaisons sont plus complexes qu’on le pense habituellement; (ii) l’ordre des méthodes diffère de ce qui transparaît dans les comparaisons (longitudinales) locales – et la méthode qui utilise la mesure compréhensive du PNN per capita en termes réels s’avère être la méthode la moins insatisfaisante. Le leçon majeure est qu’on ne peut faire de telles comparaisons qu’avec le plus grand soin. Les comparaisons doivent être faites en utilisant les prix locaux réels (calculés selon les règles de la parité du pouvoir d’achat) quand les installations environnementales dont on ne fait pas commerce jouent un rôle important.

Suggested Citation

  • Geir B. Asheim, 2010. "Global welfare comparisons," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 43(4), pages 1412-1432, November.
  • Handle: RePEc:wly:canjec:v:43:y:2010:i:4:p:1412-1432
    DOI: 10.1111/j.1540-5982.2010.01619.x
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    9. Geir B. Asheim, 2003. "Green national accounting for welfare and sustainability:A Taxonomy Of Assumptions And Results," Scottish Journal of Political Economy, Scottish Economic Society, vol. 50(2), pages 113-130, May.
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    Cited by:

    1. Nick Hanley & Louis Dupuy & Eoin McLaughlin, 2015. "Genuine Savings And Sustainability," Journal of Economic Surveys, Wiley Blackwell, vol. 29(4), pages 779-806, September.
    2. Haradhan Kumar Mohajan, 2011. "The Real Net National Product in Sustainable Development," KASBIT Business Journals (KBJ), Khadim Ali Shah Bukhari Institute of Technology (KASBIT), vol. 4, pages 89-103, December.
    3. Marc Fleurbaey & Guillaume Gaulier, 2009. "International Comparisons of Living Standards by Equivalent Incomes," Scandinavian Journal of Economics, Wiley Blackwell, vol. 111(3), pages 597-624, September.
    4. Haradhan Kumar Mohajan, 2011. "The NNP and Sustainability in Open Economy: Highlights on Recent World Economy and on Open Economy of Bangladesh," KASBIT Business Journals (KBJ), Khadim Ali Shah Bukhari Institute of Technology (KASBIT), vol. 4, pages 32-47, December.
    5. repec:ksb:journl:v:4:y:2011:i:1:p:32-47 is not listed on IDEAS
    6. repec:ksb:journl:v:4:y:2011:i:1:p:89-103 is not listed on IDEAS
    7. Mohajan, Haradhan, 2010. "Green net national product for the sustainability and social welfare," MPRA Paper 50840, University Library of Munich, Germany, revised 18 Feb 2011.
    8. Mota, Rui Pedro & Cunha-e-Sá, Maria A., 2019. "The Role of Technological Progress in Testing Adjusted Net Savings: Evidence from OECD Countries," Ecological Economics, Elsevier, vol. 164(C), pages 1-1.
    9. Mota, Rui Pedro & Domingos, Tiago, 2013. "Assessment of the theory of comprehensive national accounting with data for Portugal," Ecological Economics, Elsevier, vol. 95(C), pages 188-196.

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    More about this item

    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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