Does the Choice of Well-Being Measure Matter Empirically?: An Illustration with German Data
Koen Decancq () and
Dirk Neumann ()
No 717, SOEPpapers on Multidisciplinary Panel Data Research from DIW Berlin, The German Socio-Economic Panel (SOEP)
We discuss and compare fi ve measures of individual well-being, namely income, an objective composite well-being index, a measure of subjective well-being, equivalent income, and a well-being measure based on the von Neumann-Morgenstern utilities of the individuals. After examining the information requirements of these measures, we illustrate their implementation using data from the German Socio-Economic Panel (SOEP) for 2010. We fi nd sizeable differences in the characteristics of the individuals identi ed as worst of according to the different well-being measures. Less than 1% of the individuals belong to the bottom decile according to all five measures. Moreover, the measures lead to considerably different well-being rankings of the individuals. These findings highlight the importance of the choice of well-being measure for policy making.
Keywords: Income; composite well-being index; life satisfaction; equivalent income; von Neumann-Morgenstern utility function; worst off; Germany (search for similar items in EconPapers)
JEL-codes: D31 D63 I30 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-hap, nep-ltv and nep-upt
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Working Paper: Does the choice of well-being measure matter empirically? An illustration with German data (2014)
Working Paper: Does the Choice of Well-Being Measure Matter Empirically? An Illustration with German Data (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:diw:diwsop:diw_sp717
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