Copula-based measurement of dependence between dimensions of well-being
Well-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 framework to order societies with respect to their dependence. A class of measures of dependence is derived to which the multidimensional rank correlation coefficient belongs. 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).
|Date of creation:||Dec 2009|
|Date of revision:|
|Contact details of provider:|| Web page: http://feb.kuleuven.be/Economics/|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Larry G. Epstein & Stephen M. Tanny, 1980. "Increasing Generalized Correlation: A Definition and Some Economic Consequences," Canadian Journal of Economics, Canadian Economics Association, vol. 13(1), pages 16-34, February.
- Denuit, Michel & Lambert, Philippe, 2005. "Constraints on concordance measures in bivariate discrete data," Journal of Multivariate Analysis, Elsevier, vol. 93(1), pages 40-57, March.
- Joe, Harry, 1990. "Multivariate concordance," Journal of Multivariate Analysis, Elsevier, vol. 35(1), pages 12-30, October.
- Indranil Dutta & Prasanta K. Pattanaik & Yongsheng Xu, 2003. "On Measuring Deprivation and the Standard of Living in a Multidimensional Framework on the Basis of Aggregate Data," Economica, London School of Economics and Political Science, vol. 70(278), pages 197-221, 05.
- M. Taylor, 2007. "Multivariate measures of concordance," Annals of the Institute of Statistical Mathematics, Springer;The Institute of Statistical Mathematics, vol. 59(4), pages 789-806, December.
- Galina Besstremyannaya, 2007. "Out-of-Pocket Health Care Expenditures by Russian Consumers with Different Health Status," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 14(2), pages 331-338, November.
- Valentino Dardanoni & Peter Lambert, 1998.
"Horizontal inequity comparisons,"
IFS Working Papers
W98/07, Institute for Fiscal Studies.
- Inna Blam & Sergey Kovalev, 2006. "Spontaneous commercialisation, inequality and the contradictions of compulsory medical insurance in transitional Russia," Journal of International Development, John Wiley & Sons, Ltd., vol. 18(3), pages 407-423.
- A. B. Atkinson & F. Bourguignon, 1982. "The Comparison of Multi-Dimensioned Distributions of Economic Status," Review of Economic Studies, Oxford University Press, vol. 49(2), pages 183-201.
- Ana C. CEBRIÁN & Michel DENUIT & Olivier SCAILLET, 2002.
"Testing for Concordance Ordering,"
FAME Research Paper Series
rp41, International Center for Financial Asset Management and Engineering.
- Cebrián, Ana C. & Denuit, Michel & Scaillet, Olivier, 2004. "Testing for Concordance Ordering," ASTIN Bulletin: The Journal of the International Actuarial Association, Cambridge University Press, vol. 34(01), pages 151-173, May.
- DECANCQ, Koen, 2010.
"Copula-based orderings of multivariate dependence,"
CORE Discussion Papers
2010012, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Doorslaer, Eddy van & Jones, Andrew M., 2003. "Inequalities in self-reported health: validation of a new approach to measurement," Journal of Health Economics, Elsevier, vol. 22(1), pages 61-87, January.
- Marco Scarsini & Antonio Colangelo & Moshe Shaked, 2006.
"Some positive dependence stochastic orders,"
- Michael Lokshin & Martin Ravallion, 2008. "Testing for an economic gradient in health status using subjective data," Health Economics, John Wiley & Sons, Ltd., vol. 17(11), pages 1237-1259.
- M. Fleurbaey & A. Trannoy, 2000.
"The Impossibility of a Paretian Egalitarian,"
THEMA Working Papers
2000-26, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
- Schmid, Friedrich & Schmidt, Rafael, 2007. "Multivariate conditional versions of Spearman's rho and related measures of tail dependence," Journal of Multivariate Analysis, Elsevier, vol. 98(6), pages 1123-1140, July.
- Moulin, H & Thomson, W, 1995. "Axiomatic Analysis of Resource Allocation," RCER Working Papers 400, University of Rochester - Center for Economic Research (RCER).
When requesting a correction, please mention this item's handle: RePEc:ete:ceswps:ces09.24. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (library EBIB)
If references are entirely missing, you can add them using this form.