Happiness, equivalent incomes and respect for individual preferencesHappiness, equivalent incomes and respect for individual preferences
Faculty of Social Sciences. Sociology
Herman Deleeck Centre for Social Policy
Economica / London School of Economics and Political Science. - London
82(2015):s:, p. 1082-1106
University of Antwerp
In this paper, we study interpersonal comparisons of wellbeing. We show that using subjective wellbeing (SWB) levels can be in conflict with individuals' judgments about their own lives. We propose therefore an alternative wellbeing measure in terms of equivalent incomes that respects individual preferences. We show how SWB surveys can be used to derive the ordinal information about preferences needed to calculate equivalent incomes. We illustrate our approach with Russian panel data (RLMS-HSE) for the period 19952003 and compare it to standard wellbeing measures such as expenditures and SWB. We find that different groups are identified as worst off.