Does Going Beyond Income Make a Difference? Income vs. Equivalent Income in the EU over the Great Recession
Keywords:
well-being, multi-dimensional, equivalent income, social welfare, non-income dimensionsAbstract
We study whether taking into account non-income dimensions along with income while measuring individual well-being matters for cross-country welfare comparisons. We focus on the 27 EU member states over the period 2007-2011, using data from the European Quality of Life Survey. Individual well-being is measured by equivalent income, which is equal to the actual income minus the monetary value of suffering from not having the best achievements in non-income dimensions. Cross-country comparisons of these statistics and their growth rates show that going “beyond income” makes a substantial difference. We find that when social welfare is measured by an index sensitive to both mean well-being and its inequality, leaving out non-income dimensions, especially health, from well-being measurement, would leave unexplained more than half of cross-country variation in social welfare. Taking non-income dimensions into account affects more the part of social welfare that is inequality-sensitive than the one that is mean sensitive.
Additional Files
Published
How to Cite
Issue
Section
License
Copyright (c) 2020 Marko Ledić, Ivica Rubil
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Copyright Notice
Public Sector Economics (PSE) is a an Open Access Journal licensed under a Creative Commons Attribution-NonCommercial 4.0 International License, which permits use and redistribution (commercial and non-commercial), as long as the licensed work is passed along unchanged and in whole, with credit to PSE as original publisher.
Authors retain the copyright on the papers published in PSE but grant the right of first publication to the journal.
Papers published in PSE can be re-published only exceptionally and in unaltered form, e.g., as a chapter in a volume of an author’s collected papers, or as an unabridged translation for educational purposes. The author(s) must obtain written permission of the publisher and clearly indicate in a first page footnote the reference to the original publication in PSE.
Individual users may access, download, copy and display the papers published in PSE, provided that the authors’ intellectual and moral rights, reputation and integrity are not compromised. It is the obligation of the user to ensure that any reuse complies with the copyright policies of the owners.
If the content of papers published in the PSE is copied, downloaded or otherwise reused for non-commercial research and educational purposes, a link to the appropriate bibliographic citation (authors, title of the paper, PSE volume, year and page numbers) should be provided. Copyright notices and disclaimers must not be deleted.