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Inequality, income and well-being

Author

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  • DECANCQ, Koen
  • FLEURBAEY, Marc
  • SCHOKKAERT, Erik

Abstract

Individual well-being depends not only on income but also on other dimensions of life, such as health, the quality of social relations and of the environment, employment, and job satisfaction. In this paper we survey the economic literature on how to construct such overall measures of well-being. We distinguish three approaches: the capability (and functionings) approach, the use of subjective life satisfaction measures and the calculation of equivalent incomes. We discuss the normative assumptions underlying these three approaches, focusing on two issues: the degree to which individual preferences are respected and where in each approach the boundaries of individual responsibility are drawn. We compare the measurement of inequality in well-being with the use of multidimensional inequality measures. We illustrate the general theoretical issues in three domains of application: measuring the effects of household size and composition in the literature on equivalence scales, valuing publicly provided goods and services, and making international comparisons of well-being involving international PPP comparisons.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • DECANCQ, Koen & FLEURBAEY, Marc & SCHOKKAERT, Erik, 2015. "Inequality, income and well-being," LIDAM Reprints CORE 2694, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvrp:2694
    Note: In : A.B. Atkingson and F. Bourguignon (eds), Handbook of Income Distribution, vol. 2A. Elsevier, 2015, p. 67-140
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    Cited by:

    1. Crispin H. V. Cooper, 2020. "Quantitative Models of Well-Being to Inform Policy: Problems and Opportunities," Sustainability, MDPI, vol. 12(8), pages 1-13, April.
    2. Koen Decancq & Dirk Neumann, 2014. "Does the Choice of Well-Being Measure Matter Empirically?: An Illustration with German Data," SOEPpapers on Multidisciplinary Panel Data Research 717, DIW Berlin, The German Socio-Economic Panel (SOEP).
    3. Alpaslan Akay & Olivier Bargain & H. Xavier Jara, 2020. "‘Fair’ welfare comparisons with heterogeneous tastes: subjective versus revealed preferences," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 55(1), pages 51-84, June.
    4. Silvia Emili & Federica Galli, 2022. "Self-perceptions and perceptions of peers: their role in understanding expenditure behaviours," Quality & Quantity: International Journal of Methodology, Springer, vol. 56(6), pages 4573-4597, December.
    5. Pierre-Andre Chiappori & Costas Meghir, 2014. "Intrahousehold Inequality," Cowles Foundation Discussion Papers 1948, Cowles Foundation for Research in Economics, Yale University.
    6. Schlee, Edward E. & Ali Khan, M., 2023. "Money-metrics in local welfare analysis: Pareto improvements and equity considerations," Journal of Economic Theory, Elsevier, vol. 213(C).
    7. Koen Decancq, 2017. "Measuring Multidimensional Inequality in the OECD Member Countries with a Distribution-Sensitive Better Life Index," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 131(3), pages 1057-1086, April.
    8. Decancq, Koen & Nys, Annemie, 2021. "Non-parametric well-being comparisons," European Economic Review, Elsevier, vol. 133(C).
    9. Benjamin Schalembier, 2019. "An Evaluation of Common Explanations for the Impact of Income Inequality on Life Satisfaction," Journal of Happiness Studies, Springer, vol. 20(3), pages 777-794, March.
    10. Akay, Alpaslan & Bargain, Olivier & Elsayed, Ahmed, 2018. "Everybody's a Victim? Global Terror, Well-Being and Political Attitudes," Working Papers in Economics 733, University of Gothenburg, Department of Economics.
    11. Fleurbaey, Marc & Zuber, Stéphane, 2017. "Fair management of social risk," Journal of Economic Theory, Elsevier, vol. 169(C), pages 666-706.
    12. Akay, Alpaslan & Bargain, Olivier & Elsayed, Ahmed, 2020. "Global terror, well-being and political attitudes," European Economic Review, Elsevier, vol. 123(C).
    13. Paolo Brunori, 2016. "Review of Joseph Fishkin 's Bottlenecks: A New Theory of Equal Opportunity," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 62(1), pages 198-205, March.
    14. Aurélie Méjean & Peron Collins-Sowah & Céline Guivarch & Franziska Piontek & Bjoern Soergel & Nicolas Taconet, 2024. "Climate change impacts increase economic inequality: evidence from a systematic literature review," Post-Print hal-04637031, HAL.

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