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Contructing A Broader Measure Of Welfare Incorporating The Access To Public Goods

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  • Felipe Diniz

Abstract

This paper attempts to construct a broader measure of welfare that takes in account the access people have to some public goods. If the data on household access to public goods and private assets is assumed to be the result of a maximization problem, a latent indirect utility level may be estimated by some factor model. In this paper the individual measure of welfare is constructed using Principal Component Analysis (PCA) in the ownership of private assets and the existence of public goods in the neighborhood the agent lives in. The resulting welfare distributions are used in different analysis: Calculate the treatment effect of having access to certain public goods; investigate the effects of public goods in poverty and inequality alleviation; development of an algorithm to locate public goods in order to maximize some social welfare function.

Suggested Citation

  • Felipe Diniz, 2005. "Contructing A Broader Measure Of Welfare Incorporating The Access To Public Goods," Anais do XXXIII Encontro Nacional de Economia [Proceedings of the 33rd Brazilian Economics Meeting] 045, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    • Handle: RePEc:anp:en2005:045
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    File URL: http://www.anpec.org.br/encontro2005/artigos/A05A045.pdf
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    References listed on IDEAS

    as
    1. Maital, Shlomo, 1973. "Public Goods and Income Distribution: Some Further Results," Econometrica, Econometric Society, vol. 41(3), pages 561-568, May.
    2. Pedro Carneiro & Karsten T. Hansen & James J. Heckman, 2003. "Estimating Distributions of Treatment Effects with an Application to the Returns to Schooling and Measurement of the Effects of Uncertainty on College," NBER Working Papers 9546, National Bureau of Economic Research, Inc.
    3. Aaron, Henry & McGuire, Martin, 1970. "Public Goods and Income Distribution," Econometrica, Econometric Society, vol. 38(6), pages 907-920, November.
    4. Carneiro, Pedro & Hansen, Karsten T. & Heckman, James J., 2003. "Estimating Distributions of Treatment Effects with an Application to the Returns to Schooling and Measurement of the Effects of Uncertainty on College Choice," IZA Discussion Papers 767, Institute of Labor Economics (IZA).
    5. Rubin Saposnik, 1983. "On evaluating income distributions: Rank dominance, the Suppes-Sen grading principle of justice, and Pareto optimality," Public Choice, Springer, vol. 40(3), pages 329-336, January.
    6. Jeong, Hyeok & Townsend, Robert M., 2008. "Growth And Inequality: Model Evaluation Based On An Estimation-Calibration Strategy," Macroeconomic Dynamics, Cambridge University Press, vol. 12(S2), pages 231-284, September.
    7. Pedro Carneiro & Karsten T. Hansen & James J. Heckman, 2003. "2001 Lawrence R. Klein Lecture Estimating Distributions of Treatment Effects with an Application to the Returns to Schooling and Measurement of the Effects of Uncertainty on College Choice," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(2), pages 361-422, May.
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    More about this item

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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