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Non-parametric well-being comparisons

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  • Decancq, Koen
  • Nys, Annemie

Abstract

We study the problem of making interpersonal well-being comparisons when individuals have heterogeneous preferences. We present a robust, but incomplete, criterion for interpersonal well-being comparisons that states that one individual is better off than another if the intersection between the extended upper contour set of the better-off individual and the extended lower contour set of the worse-off individual is empty. We implement the criterion in the consumption-health space using an online survey of 2260 respondents in the United States to investigate how complete the resulting interpersonal well-being comparison is. To chart the contour sets of the respondents, we propose a new “adaptive bisectional dichotomous choice” (ABDC) procedure that is based on a limited number of dichotomous choices and some mild non-parametric assumptions about the preferences. We find that one fifth of all pairs of respondents can be ranked with the criterion.

Suggested Citation

  • Decancq, Koen & Nys, Annemie, 2021. "Non-parametric well-being comparisons," European Economic Review, Elsevier, vol. 133(C).
    • Handle: RePEc:eee:eecrev:v:133:y:2021:i:c:s0014292121000192
    DOI: 10.1016/j.euroecorev.2021.103666
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    Cited by:

    1. Domenico Moramarco & Bram De Rock, 2022. "Nonparametric analysis of heterogeneous multidimensional fairness," Working Papers 621, ECINEQ, Society for the Study of Economic Inequality.
    2. Cabeza Martínez, Begoña, 2023. "Social preferences, support for redistribution, and attitudes towards vulnerable groups," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 107(C).
    3. DECANCQ Koen & OLIVERA Javier & SCHOKKAERT Erik, 2018. "Program evaluation and ethnic differences: the Pension 65 program in Peru," LISER Working Paper Series 2018-21, Luxembourg Institute of Socio-Economic Research (LISER).
    4. Begoña Cabeza;, 2023. "Social preferences, support for redistribution, and attitudes towards vulnerable groups," Working Papers 2308, Herman Deleeck Centre for Social Policy, University of Antwerp.

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    More about this item

    Keywords

    Interpersonal well-being comparisons; Non-parametric; Preferences;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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