Empirical Welfare Analysis: When Preferences Matter

Jean-François Carpantier and Christelle Sapata ()
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Christelle Sapata: Facultés Universitaires de Saint Louis, Bruxelles

DEM Discussion Paper Series from Department of Economics at the University of Luxembourg

Abstract: Fleurbaey and Maniquet have proposed the criteria of conditional equality and of egalitarian equivalence to assess the equity among individuals in an ordinal setting. Empirical applications are rare and only partially consistent with their framework. We propose a new empirical approach that relies on individual preferences, is consistent with the ordinal criteria and enables to compare them with the cardinal criteria. We estimate a utility function that incorporates individual heterogeneous preferences, obtain ordinal measures of well-being and apply conditional equality and egalitarian equivalence. We then propose two cardinal measures of well-being, that are comparable with the ordinal model, to compute Roemer’s and Van de gaer’s criteria. Finally we compare the characteristics of the worst-off displayed by each criterion. We apply this model to a sample of US micro data and obtain that about 18% of the worst-off are not common to all criteria.

Keywords: Random Utility; Preference Heterogeneity; Welfare; Inequality of Opportunity; Labour Supply (search for similar items in EconPapers)
JEL-codes: C35 D31 D63 H24 H31 J22 (search for similar items in EconPapers)
Date: 2013
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https://hdl.handle.net/10993/13649 (application/pdf)

Related works:
Journal Article: Empirical welfare analysis: when preferences matter (2016)
Working Paper: Empirical welfare analysis: when preferences matter (2016)
Working Paper: Empirical Welfare Analysis: When Preferences Matter (2013)
Working Paper: Empirical Welfare Analysis: When Preferences Matter (2013)
Working Paper: Empirical Welfare Analysis: When Preferences Matter (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:luc:wpaper:13-11

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