The Empirical Welfare Content of International Price and Income Comparisons

Hubert Wu

Papers from arXiv.org

Abstract: Multilateral index numbers are often used to make claims about welfare, such as treating PPPs as cross-country costs of living or real incomes as indicators of living standards. However, such interpretations may not be consistent with the observed data. To study this problem, I derive multilateral bounds on welfare implied by revealed preference and use these to appraise leading comparison methods. My findings support the welfare-interpretability of the contemporary indices I examine, but not of market exchange rates. When using a welfare-consistent multilateral index, the world in 2017 appears larger and more equal vis-\`a-vis the United States than conventional measures.

Date: 2025-04, Revised 2025-12
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://arxiv.org/pdf/2504.16654 Latest version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2504.16654

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().