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Measuring multidimensional inequality in the OECD Member Countries with a distribution-sensitive Better Life Index

Koen Decancq ()

No 386, Working Papers from ECINEQ, Society for the Study of Economic Inequality

Abstract: The Better Life Index was introduced by the OECD as a tool to chart the multidimensional well-being of its member countries. However, the Better Life Index relies only on aggregate country-level indicators, and hence is insensitive to how multidimensional well-being is distributed within countries. This paper discusses how a distribution-sensitive Better Life Index could be designed. A broad family of distribution-sensitive Better Life Indices is discussed and decomposed in interpretable building blocks. While a rich and comprehensive micro-level data set is necessary to implement the distribution-sensitive Better Life Index, no such data set is currently available for all OECD member countries. The paper constructs therefore a ‘synthetic’ data set that relies on information about macro-level indicators and micro-level data from the Gallup World Poll. The implementation of the distribution-sensitive Better Life Index is illustrated with this synthetic data set. The illustration indicates that, when taking the distribution of well-being into account, Nordic countries are top-ranked whereas Greece, the Russian Federation and Turkey occupy the bottom positions. The results indicate considerable losses due to multidimensional inequality for OECD member countries. In addition, sizeable differences are found in the level and composition of multidimensional inequality.

Keywords: Better Life Index; multidimensional well-being; multidimensional inequality. (search for similar items in EconPapers)
JEL-codes: I31 C43 O1 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cis and nep-hap
Date: 2015-12
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Related works:
Journal Article: Measuring Multidimensional Inequality in the OECD Member Countries with a Distribution-Sensitive Better Life Index (2017) Downloads
Working Paper: Measuring Multidimensional Inequality in the OECD Member Countries with a Distribution-Sensitive Better Life Index (2015) Downloads
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