Measurement of Social Welfare and Inequality in Presence of Partially-ordered Variables

Mohammad Abu-Zaineh and Sameera Awawda ()
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Sameera Awawda: Economics Department and the Institute of Community and Public Health, Birzeit University, Birzeit, Palestine, https://www.birzeit.edu/en/faculty-staff/sameera-awawda

No 2231, AMSE Working Papers from Aix-Marseille School of Economics, France

Abstract: We address the question of the measurement of social welfare and inequalities in the context of partially-ordered health variables. We propose a general framework based on the assumption that the distribution of well-being states forms an m-dimensional Boolean lattice. To this end, the distribution of well-being states is constructed based on the prevalence of a finite number of illnesses where each state represents the number of illnesses an individual may suffer from. The implementation of the framework involves breaking down the Boolean lattice into a set of linear extensions where all health states become fully ordered. The linear extensions account for all possible ordering of the health states based on the depth of health problems (i.e., the severity of health conditions). Having constructed these linear extensions, we then proceed on ranking distributions in terms of welfare by applying appropriate dominance criteria and employ aggregate metrics to provide a numerical representation of the social welfare and inequality associated with each distribution. An illustrative application of the methodology is provided.

Keywords: boolean lattice; Hammond dominance; ordinal inequality; partially-ordered variables; stochastic dominance; welfare function (search for similar items in EconPapers)
JEL-codes: D63 I14 I15 O5 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2022-12
New Economics Papers: this item is included in nep-hea
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Working Paper: Measurement of Social Welfare and Inequality in Presence of Partially-ordered Variables (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:aim:wpaimx:2231

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