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Scale-Invariant Measurement of Inequality and Welfare in Ordinal Achievements: An Application to Subjective Well-Being and Education in OECD Countries

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  • Carlotta Balestra
  • Nicolas Ruiz

Abstract

Designing well-being policies often requires the use of qualitative data. In fact many dimensions of well-being have to be appraised through the use of an ordered status: that is the case with health, happiness and educational attainments. While it is important to look at the mean levels achieved by society, distributional features are also salient aspects for any evaluation exercises, as it is likely that strong disparities in achievements among the population will prevail in those dimensions. Nonetheless, standards tools for inequality analysis, essentially mean-based and thus scale-dependent, are not applicable in this context, as any choice of scale in an ordinal framework is likely to be arbitrary and subject to change. Relying on the median-based approach developed by Allison and Foster (J Health Econ 23:505–524, 2004 ) for the measurement of self-reported health status inequality, this paper applies scale-invariant measures to subjective well-being and educational attainments in OECD countries using the 2010 round of the Gallup World Poll. This scale-invariant approach, applied to the case of three-category ordinal variables with identical median states, generates an unambiguous inequality and welfare ordering. This ranking is further completed by the computation of a scale-invariant inequality index. Both these measures aim to provide a robust picture of inequality and welfare in an ordinal context. Copyright Springer Science+Business Media Dordrecht 2015

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  • Carlotta Balestra & Nicolas Ruiz, 2015. "Scale-Invariant Measurement of Inequality and Welfare in Ordinal Achievements: An Application to Subjective Well-Being and Education in OECD Countries," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 123(2), pages 479-500, September.
  • Handle: RePEc:spr:soinre:v:123:y:2015:i:2:p:479-500
    DOI: 10.1007/s11205-014-0751-2
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    2. M. Azhar Hussain & Nikolaj Siersbæk & Lars Peter Østerdal, 2020. "Multidimensional welfare comparisons of EU member states before, during, and after the financial crisis: a dominance approach," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 55(4), pages 645-686, December.
    3. Ramses H. Abul Naga & Christopher Stapenhurst & Gaston Yalonetzky, 2024. "Inferring inequality: Testing for median-preserving spreads in ordinal data," Econometric Reviews, Taylor & Francis Journals, vol. 43(2-4), pages 156-174, April.
    4. Jian Li & Eryong Xue & Yukai Wei & Yunshu He, 2024. "How popularising higher education affects economic growth and poverty alleviation: empirical evidence from 38 countries," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-11, December.
    5. Martyna Kobus & Olga Półchłopek & Gaston Yalonetzky, 2019. "Inequality and Welfare in Quality of Life Among OECD Countries: Non-parametric Treatment of Ordinal Data," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 143(1), pages 201-232, May.
    6. Valérie Bérenger & Jacques Silber, 2022. "On the Measurement of Happiness and of its Inequality," Journal of Happiness Studies, Springer, vol. 23(3), pages 861-902, March.
    7. Vanesa Jorda & Borja López-Noval & José María Sarabia, 2019. "Distributional Dynamics of Life Satisfaction in Europe," Journal of Happiness Studies, Springer, vol. 20(4), pages 1015-1039, April.

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