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Inequality of well-being: a multidimensional approach


Decancq, Koen & Lugo, Maria Ana (2012). Inequality of well-being: a multidimensional approach. Economica, 79(316), 721-746.


An important aspect of multidimensional wellbeing distributions is the correlation between different dimensions. We propose two indices for measuring multidimensional inequality, derived from two underlying social evaluation functions. These functions aggregate both across dimensions and across individuals. The social evaluation functions differ only with respect to the sequencing of aggregation. Aggregating first across dimensions is more attractive since it allows the inequality index to depend on the correlation between dimensions. We illustrate both indices, and the impact of correlation sensitivity, using Russian household data between 1995 and 2005 for four dimensions of wellbeing: expenditure, health, schooling and housing quality.


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Decancq, Koen
Lugo, Maria Ana