Measuring and Comparing Well-Being in South American Countries Using Equivalent Incomes

Andres Felipe Hoyos Martin ()

No 14570, Icesi Economics Working Papers from Universidad Icesi

Abstract: The purpose of this dissertation is to measure well-being in South American countries based on equivalent incomes. This measure of well-being has a multidimensional approach, and it respects preferences between individuals. We calculate equivalent incomes of individuals, using the Gallup World Poll in 2007 for six countries: Argentina, Brazil, Bolivia, Chile, Colombia and Peru. Additionally, we aggregate by country equivalent incomes as well as incomes and life satisfaction level, through a specific social welfare index with different grades of inequality aversion. We find some differences between country rankings made by incomes and equivalent incomes in spite of their strong correlation at individual level; in addition, the results present no correlations between equivalent incomes and life satisfaction level, as expected. The greatest difference in rankings is presented by Chile, which changes from the first in per capita income ranking, to the fourth in equivalent incomes ranking. Adopting equivalent incomes (based in multiple life dimensions and individual preferences) and introducing different inequality aversion parameters in the analysis lead us to better understand the well-being in Latin America.

Keywords: Equivalent Incomes; Well-being; Latin America; Preference Heterogeneity (search for similar items in EconPapers)
JEL-codes: C25 D63 I31 (search for similar items in EconPapers)
Pages: 24
Date: 2015-12-01
New Economics Papers: this item is included in nep-hap and nep-lam
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