Equivalent income versus equivalent lifetime: does the metric matter?

Harun Onder, Pierre Pestieau and Gregory Ponthiere

PSE Working Papers from HAL

Abstract: We examine the e¤ects of the postulated metric on the measurement of well-being, by comparing, in the (income, lifetime) space, two indexes: the equivalent income index and the equivalent lifetime index. Those in- dexes are shown to satisfy di¤erent properties concerning interpersonal well-being comparisons, which can lead to contradictory rankings. While those incompatibilities arise under distinct indi¤erence maps, we also ex- plore the e¤ects of the metric while relying on a unique indi¤erence map, and show that, even in that case, the postulated metric matters for the measurement of well-being. That point is illustrated by quantifying, by those two indexes, the (average) well-being loss due to the Syrian War. Relying on a particular metric leads, from a quantitative perspective, to di¤erent pictures of the deprivation due to the War.

Keywords: well-being; measurement; equivalent income; value of life (search for similar items in EconPapers)
Date: 2019-07
New Economics Papers: this item is included in nep-hap and nep-ltv
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Citations: View citations in EconPapers (3)

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Working Paper: Equivalent income versus equivalent lifetime: does the metric matter? (2019)
Working Paper: Equivalent income versus equivalent lifetime: does the metric matter? (2019)
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