Interpersonal comparisons by means of money metric utilities: why one should use the same reference prices for all

Bart Capéau, André Decoster and Liebrecht De Sadeleer

No 636146, Working Papers of Department of Economics, Leuven from KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven

Abstract: We show that using different reference prices for different individuals in money metrics of well–being leads to violations of several normative properties of interpersonal welfare comparisons that have become popular in the fairness literature. An empirical illustration for Belgian single adults available for the labour market in 2015 shows that the violation of these principles in the labour consumption context, is all but exceptional

Keywords: Money metric utility; well–being measurement; equivalent variation; labour supply (search for similar items in EconPapers)
Pages: 33
Date: 2019-03-31
New Economics Papers: this item is included in nep-upt
Note: paper number DPS 19.05
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Published in FEB Research Report Department of Economics

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Related works:
Working Paper: Interpersonal Comparisons by Means of Money Metric Utilities: Why One Should Use the Same Reference Prices for All (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:ete:ceswps:636146

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