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date: 20 January 2020

(p. 947) Subject Index

(p. 947) Subject Index

Note: Tables and figures are denoted by an italic t or f, respectively. Personal names can be located in the separately presented Author Index.

absolute Lorenz curve (ALC), 119–120, 119f
absolute well-being, 326–328
acceptance principle, 484
achievement, 379–382, 387f, 390
actual individual consumption, 34
adaptive preferences, 335–337, 622–623
additive decomposability over time, 166–168
additive independence, 164
Additively Separable Poverty (ASP) class, 112
adjusted disposable income, 35
AF (Alkire and Foster) index, 9n7, 13, 248n2, 265, 271, 276, 631–634, 691t, 691–692
affect-based approaches
emotional well-being, 348, 357–363
pleasure, 348, 349–357
aggregation
additive, 559
aggregation rule, 748
Atkinson-type, 248n2
child poverty and, 673
compensation tests, 58–61, 59f, 61f
dominance tests and, 701
entropy-type, 264
evaluation through national accounts, 24
in IMWB approach, 263
intrapersonal, 658
objective goods and, 386–391, 387f
order of, 13, 259, 625–627, 637, 680
overview, 57
perfectionism and, 593
of preferences, 145–146
problems in measuring net benefit, 48–49
procedure for, 554, 638
Shannon entropy formula, 249
Social Aggregation Theorem, 712–713, 718, 719–729, 721n20, 722n22, 733–736
social welfare weights and, 63–67
temporal, 544
two-step, 265–266, 265n16
unweighted, 177, 185
welfarism and, 240–241
altruism, 393–394
American Life Panel, 530
annuity puzzle, 882
anonymously consistent, 212
asset boundary, 31
Atkinson index, 107, 143, 251
Atkinson-Kolm-Sen (AKS) approach, 251, 263
attitudinal account, 352
attribute additivity (AA), 687
authentic happiness, 359, 366
autonomy, 38–39, 359, 393
average income gap ratio, 109–110
aversion to inequality, 65, 106–108
avowed happiness, 403
axiomatic methods
Content and Measurement of Extended Preferences, 489–492
of inequality measurement, 85–86
Lottery Ranking, 494–497
monotonicity property, 280
multidimensional inequality indices, 278–279
of multidimensional poverty, 279–279, 683–690, 691t
postapplication relational, 200–201
of poverty measurement, 110–114
Shareability axiom, 488–489
Sovereignty Respect, 497–498
(p. 948) Structure of Outcomes and Moral Assessment, 486–488
Sympathy Connection, 492–494
weak axiom of revealed preference, 621–622
bare objective list account (BOL)
alienation and, 600–601
defined, 589
fairness and, 588–590
hybrid accounts and, 598–600
multidimensional indicators and, 605–609
vs. other theories of well-being, 590–592
perfectionism and, 593–594
preference satisfaction and, 601–605
vindication of, 594–598
well-being measures and, 609–612
basic capabilities, 397–398
basic functionings, 395–397
Basic Needs Approach, 248
Benthamite hedonism, 10, 352–353, 436
Bergson-Samuelson social welfare functions, 126–127, 137–139, 240
Best-Off Person (BOP), 98–100, 99f
Better Life Index, 248
between-types inequality, 763, 763t
Beyond GDP (Fleurbaey and Blanchet), 627
BHPS (British Household Panel Survey), 526–528, 528t, 534–535, 535t
binary relations, types of, 127–130
biopolitics, 894
blood donations, 393–394
BOP-reference inequality, 98–100, 99f
Bosmans-Decancq-Ooghe multidimensional inequality index, 264
Brave New World (Huxley), 381, 383
business achievements, 393
Cantril question, 429, 439
capability approach
capabilities and functionings defined, 617–619
challenges of well-being measurements, 615–617
vs. equivalent income, 467–470
vs. multidimensional indicators, 247, 637–639
objective goods and, 395–400
policy-relevant measurement methodology, 628–635
resources, 620–621
rise in scholarship concerning, 2
theoretical implications, 624–625
utility, happiness, and SWB, 621–624
on weights and preferences, 625–630
cardinal index, 86
cardinal measurability
and capabilities approach, 632, 636
and full comparability, 134, 143
and noncomparability, 133–134
and unit comparability, 134
well-being valuation approach and, 305–306, 479n7
CASP-19 (Control, Autonomy, Self-realisation and Pleasure), 527, 539–540, 545, 547–548
causal inference
unobserved personality traits and, 437–438
well-being valuation approach and, 306–310
causal variables, 135–136
central affect, 358
changing preferences, 338–343
child care, valuation of, 28n9
child poverty, 673
choice correspondences, 194, 196–202
circumstances, individual, 749–750
claims
claims-truncation invariance, 214–215
conflicting, 212–215
defined, 195
classical fair division problems, 195, 198f, 202–206
collective approach, to household welfare, 825–829
collective rationality assumption, 145
collective services, GDP and, 26–27
Commission on the Measurement of Economic Performance and Social Progress, 25n6
“commodity” bundles, 23, 25, 53
community indifference curves, 59, 61
comparative assessment
money-metric utility and, 789–806
(p. 949) multilateral welfare comparisons, 806–817
notation and preliminaries, 787–789
overview, 785–787, 817
in preference-based well-being, 324–325
compensating/equivalent surplus, 288n6
compensating/equivalent variation, 288n6
compensating variation (CV)
approximation of, 53–54
compensation tests, 58–61, 59f, 61f
defined, 51
expenditure function and, 52–53
household welfare and, 836–838
summing in aggregate welfare change, 57–63
compensating welfare measure, 288
composite index of well-being, information requirements, 557–559
composite indices, 31
composition down requirement, 214–215
composition up requirement, 214–215
conditional equality, 761
conditional sharing rules, 830–832
Conditions of Economic Progress (Clark), 806
consequentialism
cost-benefit analysis and, 287–288
defined, 127
consistency, fair allocation and, 201–219
constant proportional trade-off, 163, 165–166
constant returns-to-scale equivalent allocation, 208, 209f
constant-returns-to-scale lower bound, 207
constrained equal awards rule, 213
constrained equal losses rule, 213
consumer demand functions, 51
consumer price indices (CPIs), 29–30, 645
consumers’ sovereignty principle, 480
consumption, as measure of social material well-being, 25n6
consumption profiles
behavior, 880–883
policy, 883–997
Content and Measurement of Extended Preferences axiom, 489–492
contingent valuations, stated-preference approach and, 68, 289–290
continuity, 215
continuity (CON), 278, 685
contour maps, 88–91, 89f, 90f, 91f, 114–115, 115f
contraction independence, 209
control function approach, 310
converse consistency, 201, 204–205, 212, 219
correlation increasing majorization (CIM), 257, 279
correlation-increasing switch, 255, 256f
correspondences, defined, 194
cost-benefit analysis (CBA)
aggregate welfare change, 57–67
compensation tests, 58–61, 59f, 61f
vs. cost-effectiveness analysis, 47, 181–183
defined, 47
evaluation of individual welfare change, 50–56, 52f, 75–76
happiness-based policy analysis and, 287–288, 311
intertemporal issues, 72–75
nonmarketed commodities, 68–71
overview and methodology, 47–50
project risk, 71–72
in representative individual economy, 77
technical appendix, 75–77
cost-effectiveness analysis
vs. cost-benefit analysis, 47, 181–183
QALY-based, 160–185
cost-of-living index
expenditure function and, 33
more broadly defined, 35n22
price change and, 29–30
cost sharing model, 220
costs of pollution, 70
Cumulative Complaint Contour (CCC), 120
Dalton index, 251
dashboard approach, 247
Day Reconstruction Method (DRM), 531
decision conflict
conflict, 846–847
dominance, 847–850
decision utility, 292
decision weights
compatibility, 850–851
organ donation decision, 853–854
search for information, 851–853
(p. 950) decomposability property, 90, 94–97, 258–259
degradation, 356
deprivation, 356 See also Individual Deprivation Measure
desire-based account of well-being, 325
desire-fulfillment theories, 347, 380
dictator, 146
different-identity problems, 873
different-number problems, 873
dimensional breakdown, 632
dimensionality, 780
dimensional monotonicity (DIM), 268, 280, 632, 636
dimensions of well-being
Better Life Index and, 248
distribution matrix of, 250
Gajdos-Weymark generalized Gini index and, 259
hedonic vs. evaluative, 425
insufficient levels of income and, 429
matrix of policy effects, 7
monetary and nonmonetary, 568
non-income, 246, 567
non-material, 2
observed outcomes in, 566
ordinal variables and, 275
weighting, 626
direct approach (inequality indicators)
decomposability properties, 258–259
distributional properties, 253–257, 256f, 258f
invariance properties, 251–253
overview, 250–251
direct approach (poverty indicators)
indicators, 270–271
properties, 265–270
direct unfairness, 763, 764t
discounting lives
of future generations, 902–907
pros vs. cons of, 907–910
Discovered Preference Hypothesis (DPH), 292
dispositional aspects, 359
distributional ordering, 86
distributional properties, 253–257, 256f, 258f
distributional ranking, 86
distribution of income, 31
distributive characteristic, 66
dominance testing, 701–706, 703f, 704f, 847–850
double-CES multiattribute inequality indicator, 264
dual-cutoff counting methodology, 631–632
duality, concept of, 215
dynastic utility function, 73
Easterlin paradox, 428–431
economic resources, defined, 25
economic well-being, index of, 31
economies, defining, 195–196
education, objectivism and, 391–392
efficiency approach to policy evaluation, 62–63
egalitarianism
additive separable SWFs and, 723
egalitarian-equivalent allocations, 198, 198f, 233, 233f, 761
(p. 951) and ex ante vs. ex post welfare, 731–734
ex post, 887
formal, 397, 400
and individual responsibility, 746
of opportunity, 753–754, 759
and Pareto principle, 209
poverty measurement and, 238–239
strict, 904
subcomponents of, 762
egoistic preferences, 823
ELSA (English Longitudinal Study of Aging), 539–540
embedding effects, 291
emotional condition, 358
emotional state theory, 357
emotional well-being
measures of emotional well-being, 360–363
nature and significance of, 357–360
vs. subjective well-being, 348
empathetic projection, 483
endowment monotonicity, 205
envy-free allocations, 197–198, 198f
equal division, 197–210
equal-income, 202, 217
equality
assessment of, 747–751
ex ante vs. ex post, 734–739
objective goods and, 394
of opportunity, 751–762
Equality (Tawney), 394
equally distributed equivalent (EDE) income, 102–103
equal opportunities, choice correspondences and, 198–199
equal sacrifice rules, 214
equal treatment of equals, 207, 215
equal welfare for equal preferences, 209
equity considerations
in aggregate welfare change, 57–59
compensation tests and, 60
equivalence scale, unitary approach and, 824–825
equivalent expenditures, 63
equivalent income
vs. capability approach, 467–470
concept of, 455–457
vs. extended-preferences approach, 459–464
as a function of reference health, 456, 456f
history of, 453–454
information requirements, 561–563, 562f
as a measure of well-being, 457–459
social justice and, 470–471
vs. subjective well-being, 464–467
equivalent variation (EV), 51–52
equivalent welfare measure, 288
ESS (European Social Survey), 523–526, 526t, 532–534, 532t
essential single-valuedness, 194, 209
ethical principles, 100
eudaemonic well-being, 370–372, 409
European Union, policy on poverty measurement, 247n1
evaluation, separate vs. comparative
counterfactuals, 855–857
empathy and principles, 855
evaluability, 854–855
evaluative mental states, 348
evaluative well-being, 436
expenditure accounts, 22–23
expenditure function, 33
experienced utility, 292
experience machine, 332, 355, 381–383
experience-stretching hypothesis, 305–306
extended alternatives, 715
extended lotteries, 715
extended preferences
application to histories, 511–512
difference orderings, 509–511
vs. equivalent income, 459–464
Harsanyi’s account of, 480–484
normative account of moral deliberation, 485–498, 485n14, 496f
vs. other measures, 503–509
overview, 476–477
preference-based views of well-being and, 344–345
quaisiordering, 509
simple, sovereignty-respecting, 498–503
social welfare functions and, 136–137, 477–480
SSR extended preferences plus Bernoulli, 513–514
tracking conditions and risk neutrality, 512–513
extended utility function, 481
extensive social welfare functional, 127
externalism, 351
factor decomposability (FAD), 269, 280
factor decomposability (FDE), 259, 279
fair allocation
choice correspondences and rules, 196–202
classical problems of, 195, 198f, 202–206
concept of, 194–195
conflicting claims and taxes, 212–215
constant returns-to-scale equivalent allocation, 209f
defining economies, 195–196
economies with production, 206–210
equivalent income and, 454
of objects with infinitely divisible good, 215–219
other models of, 219–220
overview, 193–194
of single goods with single-peaked preferences, 210–212
vs. social ordering functions, 229, 242
solutions to fair-division problems, 198f
(p. 952) fairness
multidimensional indicators and, 588–560, 605–609
in social ordering functions (SOF), 229–235
well-being measures and, 609–612
fairness gap, 765–766, 765t
final consumption
GDP and, 26
material well-being and, 34
final value, 325–326, 325n1
first-order dominance, 117–118
fiscal harmonization measures, 62n3
fixed budget rule, 179–180
fixed-ratio rule, 179–180
flows, 23
focus (FOC), 686
focusing illusions, 291
Foster-Greer-Thorbecke (FGT) index, 113, 113n26, 114f, 275, 631, 693–694
free-access upper bound, 218
frustrated preferences, 330
functionings, 247, 395–397, 617–619, 748
fundamental preference, 136n17
fundamental well-being component, 328–330
future consumption, 38–39
future generations
arguments for and against discounting, 907–910
discounting future lives, 902–907
discounting value at times, 910–912
nonidentity effect and justice, 921–923
overview, 901–902, 925–926
and Pareto principle, 923–925
population and intuition of neutrality, 912–916, 914f, 915f
valuing population, 916–920
Gajdos-Weymark generalized Gini index, 264
Gallup-Healthways Well-Being Index, 530
GDP (gross domestic product)
calculation of, 21–23
current material well-being and, 30–36
GDP function, 29–30
material well-being over time, 36–40
relationship to welfare, 21–25, 40
shortcomings of, 1
social welfare and, 25–30
Geary-Allen International Accounts (GAIA), 813–814
Geary-Khamis method, 812
gender-sensitive poverty measurement, 668–670, 669t See also Individual Deprivation Measure
general hedonism, 919–920
generalized entropy (GE) measures, 91–93, 265n16
generalized Lorenz curves (GLC), 118–119, 119f
German SOEP (Socio-Economic Panel)
computing well-being measures, 572–574
indifference maps and life-satisfaction data, 567–572, 571t
observed outcomes in three dimensions, 566–567
overview, 565–566
GHQ (General Health Questionnaire), 527, 546–547
Gini-Elteto-Koves-Szulc (GEKS) Measure, 810–811
good functioning, 395–397
government expenditure, GDP and, 26–27
“green accounting” literature, 23–24, 31, 36–37, 37n26
gross disposable real income, 33
gross domestic product. See GDP (gross domestic product)
Gross National Happiness (GNH) Index of Bhutan, 248, 615, 634–636
growth incidence curve (GIC), 777
Hammond Equity, 151
happiness-based policy analysis
challenges related to subjective well-being approach, 303–311
cost-benefit analysis and valuation, 287–288
derivation of subjective well-being valuation approach, 301–303
overview, 286–287
policy implications of, 311
(p. 953) preference-based valuation methods, 288–292
rise in scholarship concerning, 1–2
subjective well-being valuation, 288, 293–301, 293f
use of “happiness” term, 403–404 See also mental state approaches
happiness threshold, 635–636
head-count ratio, 109, 276, 652–655, 693–696
health, German SOEP data, 566–567
health benefits, 70–71
hedonic well-being
attractions of hedonism, 353–355
Benthamite hedonism, 10
defined, 347, 349–350
vs. eudaemonic well-being, 409
general, 920–921
hedonic balance, 360–363
hedonic pricing method, 289
nature and significance of pleasure, 351–353
objections to, 380–381
objections to hedonism, 355–357
vs. other kinds of hedonism, 350–351
vs. other theories of well-being, 380, 591–592
preference-based views of well-being and, 322–324, 332
sadistic pleasure and, 596–597
subjective well-being data and, 467
heterogeneity of households, 33–35
heterogeneous effects, well-being valuation approach, 304–305
Hicks compensation test, 60, 62–63
Hill approach, 815
holistic effects, 330n7
homogeneity property, 214–215
homotheticity, 90
Hospital Anxiety and Depression Scale (HADS), 362–363
household consumption
adjusted measure of, 22
as compliment to SNA, 24–25
defined, 25
household disposable income, 24–25
household production, GDP and, 28n9
household welfare
collective model, 825–829
identification problem, 838–840
vs. individual, 821–822
measuring individual welfare, 829–835
normative issues in, 835–838
policy implications of, 840–841
theoretical framework, 822–823
unitary approach, 824
human capital, GDP adjustments and, 31
Human Development Index (HDI), 31, 248, 458, 680, 691–692
human good, vs. well-being, 379
Human Opportunity Index (HOI), 778
Human Poverty Index (HPI), 680–682, 691–692, 691t
ideal preferences, 333–335, 347
Idea of Justice, The (Sen), 628–629
identical-preferences lower bound, 197, 207, 217
identical-preferences upper bound, 197
identification problem, 838–840
Impartial Observer Theorem, 714–719
impoverishment, 355–356
inauthenticity, 356
inclusive measure of well-being (IMWB), 248n6, 250, 259–265, 271–274
income
equivalent, 296, 453–471, 561–563, 562f
German SOEP data, 566
gross disposable, 33
growth of and social welfare, 102f
Hicks’s definition of, 37
inequality of in 41 countries, 770–771t
information requirements, 556–557
insufficient levels of, 429
labor income taxation, 235–238, 237f
as measure of social material well-being, 25n6
real, 32–33, 63
and social welfare, 23
income compensations, 297, 302
income distributions, 83–85, 84f, 85f, 88f, 89f
increasing poverty under correlation increasing switch (IPC), 269, 280
incremental cost-effectiveness ratio (ICER), 178–179
(p. 954) independence property, 111, 145–147, 230–231
indifference curves, 233
indifference maps, and life-satisfaction data, 567–572, 571t
indifference to health quality, 169
indirect effects, 47
indirect utility function, 51
Individual Deprivation Measure (IDM)
correlating with financial status, 666f
vs. current poverty measures, 646–652
design of, 658–667
dimensions and increments, 664t
evaluation of, 667–671, 668t, 669t
explication of dimensions, 664t
as feminist, pro-poor approach, 652–654
future research needed, 671–674
qualitative research, 654–655
selecting dimensions for, 655–658
individual-endowment monotonicity, 205
individual-endowments lower bound, 205
individual goods and services, GDP and, 26–28
individualistic approach, 47–48, 64, 138–140
individual responsibility, 778–780
individual well-being
best prediction of, 537–542
correlates of SWB, 529–537, 533t, 535t, 536t
correlations between SWB measures, 523–529, 526t, 528t
vs. household, 821–822
measurement of, 543–544, 829–835
overview of, 545–546
SWB as a measure of, 518–523
inequality, measurements of
framework for, 83–86, 84f, 85f
isoelastic functions, 105, 105f
multidimensional indicators of, 246–280
overview, 82
principles of, 86–100, 88f, 89f, 90f
ranking, 115–122
rise in scholarship concerning, 2
social evaluation functions, 104, 104f
social welfare and income growth, 102f
social welfare and values, 100–108
tools for, 86
inequality aversion parameter, 65, 106–108
inequality of economic opportunity (IEO), 767–775, 770–771t
inequality of opportunity
economic models of EOp, 751–762
empirical applications, 766–775, 770–771t
income inequality comparison by country, 770–771t
individual responsibility and, 778–780
inequality of opportunity comparison by country, 772–773t
measurement of, 762–766
overview, 746–747
philosophical background, 747–751
poverty and economic development, 775–778
welfare criteria, allocation rules, and inequality measures, 766t
Inequality Re-examined (Sen), 627
informationally equivalent profiles, 131–132
information constraint, 359
information invariance, 139–141
information requirements
capabilities approach and, 629–630
composite index of well-being, 557–559
equivalent income, 561–563, 562f
income, 556–557
overview, 555–556
subjective well-being (SWB), 559–561
von Newman–Morgenstern (vNM) utilities, 563–565, 565f
Inquiry into the Nature and Causes of the Wealth of Nations, An (Smith), 250
insensitivity to scope, 291
instrumental value, 325–326, 325n1
instrumental variable (IV) methods, 307, 307n11
interdeliberator convergence, 484
intergenerational well-being, 39n30, 74
intermediate consumption, 26n7
internalism, 351, 351n9
International Comparison Program (ICP), 806–810
interpersonal comparability
of bundles, 197
prediction of individual well-being and, 537
well-being valuation approach and, 305–306
(p. 955) intersection criterion, 266
intertemporal allocation, 219
intertemporal well-being
cost-benefit analysis and, 72–75
link to measurement of wealth, 38, 39n29
intrapersonal bounds, 196
invariance properties, 251–253
invariance transforms, 132–135
irrational preferences, 333–335
isoelastic functions, 105, 105f
judgement-based approaches, 348, 364–370
Kaldor-Hicks compensation test, 287
Kaldor weak/strong tests, 60–62, 62n3
knowledge, 381–384, 383f, 387f
Kolm index, 251
Konus price index, 799–802, 809–810
labor, shadow price of, 55–56
labor income taxation, 232–233, 235–238, 237f
labor market status, German SOEP data, 567
language-squishing hypothesis, 305–306
Laplace’s Principle of Insufficient Reasons, 715–719
leisure, valuation of, 31, 69
life-cycle theory, 873, 880–881
life satisfaction
and indifference maps, 567–572, 571t
measurement of, 367–369
nature and significance of, 364–367
vs. subjective well-being, 348
lifetime well-being
consumption profiles: behavior, 880–883
consumption profiles: policy, 883–997
definition of, 874–876
formal structure of, 876–880
overview, 871–874
period survival curves (US), 872f
policy implications of, 894–895
prevention profiles: behaviors, 888–891
prevention profiles: policies, 891–894
linear opinion pool, 726
Lorenz curves, 118–121, 119f
Lottery Ranking axiom, 494–497
lower bounds, defined, 196
marginal rate of substitution (MRS), 291
market economy, 394–395
Maslow’s hierarchy of needs, 520, 520f
material well-being
adjustments to GDP and, 30–32
broader measures of, 25n6
defined, 25
heterogeneity of households, 33–36
measurement of, 23–24
over time and GDP, 36–40
real income and, 32–33
maximum endurable time, 169
measure of dissimilarity, 815
Measuring the Real Size of the World Economy, 806
mental state approaches
emotional well-being, 357–363
eudaemonic vs. subjective approaches, 370–372
life satisfaction, 364–370
overview, 347–349
pleasure, 349–357
policy implications of, 372–373
Mexican Multidimensional Poverty Index, 666
minimal cost networks, 219
minimal-rights first rule, 214–215
minimum acceptable levels, 266
minimum dimension weight, 266n18
minimum spanning trees, 815, 816f
min-of-means SWF, 736–737
monadic attitudes, 325, 326–328
money-metric utility, 52–53, 233, 234f, 454, 829, 833–834
Money-Metric Welfare Index (MMWI), 833–834
money monotonicity, 217
monotonicity property
axiomatic method, 280
defined, 101, 112n24
fair allocation and, 214
multidimensional indicators of poverty and, 268, 686
solidarity and, 199–200
morally vicious pleasures, 381
(p. 956) moral preference, 155
moral value judgments, 481
moral virtues, 384–385
multidimensional indicators
of inequality, 250–265, 256f, 260–262t, 278–279
main relevant considerations, 276–277
overview, 246–250
technical appendix, 277–280
of well-being, 588–612
multidimensional measures of poverty
appeal of, 248–249
axioms, 278–279, 684–691, 688f, 689f
and capabilities approach, 632–633, 637–639
criticisms of, 696–700, 698f, 699f, 700f
vs. current poverty measures, 677–678
development of, 678–679
direct approach, 265–271
example of, 272–274t
examples of, 691–696, 691t, 694f
formal setting for, 682–684, 684f
improvements to, 700–706
IMWB-based approach, 271–275
for ordinally measureable dimensions, 275–276
in practice, 679–682 See also poverty, measurement of
Multidimensional Poverty Index (MPI), 2, 248, 650–651, 650t, 668t, 679, 681, 691t, 706
multidimensional transfers principle (MT), 269, 280
multiple-attribute one (MPDT), 687–689, 688f, 689f
multiplicative QALY model, 162–163
multivariate stochastic dominance, 248
mutual utility independence, 162–163, 164–165
national accounts. See System of National Accounts (SNA)
National Council for the Evaluation of Social Policy (CONEVAL), 248
national product function, 29–30
natural amenities, 70
natural resources depletion, 31
net adjusted disposable household income, 34–35, 34n17
net national product, 37n24
Neumann–Morgenstern (vNM) function, 176, 459–463, 482, 554, 556, 564–565, 565f, 571t, 573–574, 579t
neutral, bilateral consistency, 219
New Architecture for the U.S. National Accounts (Jorgenson, et. al), 25
no-domination across agents, 202
no-domination of, or by, equal division, 202
no-envy in trades, 205
noncomparability relation, 128
no negative effects on others requirement, 205
nonidentity effect
and justice, 921–923
and Pareto principle, 923–925
nonmarketed commodities
costs of pollution, 70
health benefits, 70–71
natural amenities, 70
overview, 68
value of reduced risk of death, 69–70
value of time saved, 68–69
willingness to pay for, 48, 51–52
nonmoral goods, 381–383
normalization (NOM), 278–279
normative account of moral deliberation
Content and Measurement of Extended Preferences axiom, 489–492
Lottery Ranking axiom, 494–497
overview, 485
Shareability axiom, 488–489
Sovereignty Respect axiom, 497–498
Structure of Outcomes and Moral Assessment axiom, 486–488
Sympathy Connection axiom, 492–494
Tracking Condition, 494–497, 496f
normative approach, 251
object allocation/reallocation, 220
objective goods
aggregating, 386–391, 387f
capabilities and, 395–400
defined, 379
moral virtues, 384–385
nonmoral goods, 381–384
(p. 957) objections to hedonism, 380
vs. objective-list theories, 380
other goods, 385–386
overview, 379
policy impact, 391–395
vs. subjective theories, 379–380
unified approach to, 380
objective-list conception, 130, 347, 380
objectivism
forms of, 351, 371
policy implications of, 391–396
pros of, 594
object monotonicity, 218
object preferentialism, 323–324, 328–330, 342
objects, defined, 216
obligations, defined, 195
Odyssey (Homer), 380
Office for National Statistics (ONS), 286, 528–529, 529t, 535–537, 536t
one-sided population-monotonic, 212
one-sided resource-monotonicity, 212
one-sided welfare-dominance under preference replacement, 212
opportunities, choice correspondences and, 197
opportunity-sensitive poverty measures (OSPM), 776
opulence, defined, 25
order preservation property, defined, 214
ordinality, 50
ordinal measurability
and capabilities approach, 632, 636
and full comparability, 133, 137, 142
for multidimensional poverty, 275–276
and noncomparability, 133, 144
ordinary least squares (OLS) regression, 305
organ donation decision, 853–854
other-regarding preferences, 337–338
own-account production, 22, 31
ownership, defined, 195
Oxford Poverty and Human Development Initiative (OPHI), 649–650
PANAS scale, 361
Parade diagram, 118
Pareto principle
arguments against, 463
defined, 196
fair allocation and, 209–212
multidimensional indicators and, 263
nonidentity effect and, 923–925
quasi-ordering, 127, 129, 147, 147n35
social ordering functions and, 227–231, 227n1
Strong Pareto Principle, 151–153
partitioning a nonhomogeneous continuum, 220
path-state approach, 167
Pazner-Schmeidler egalitarian equivalent SOF, 233, 239
peak amounts, 210–212
peak-only rules, 211
Pen’s Parade diagram, 118
perfectionism, 593–597
peripheral affect, 358
permanent income hypothesis, 880–881
personal hedonism, 919
personal restrictions, 337, 337n10
phenomenological intuition, 354
Philebus (Plato), 380
Pigou-Dalton transfers principle
defined, 253–254
multidimensional indicators of poverty and, 687–689, 688f, 689f
social ordering functions and, 227–228
social welfare functions and, 152
pleasure, 348, 349–357, 381
polarity of attitudes, 326–327
policy assessment challenges
comparative assessment, 785–818
household welfare, 821–841
individual responsibility and equality of opportunity, 746–780
lifetime well-being, 871–895
overview of Handbook chapters, 15–17
preference inconsistency, 844–865
role of political feasibility, 49–50
social evaluation under risk and uncertainty, 711–739
well-being of future generations, 901–926
policy assessment methods
cost-benefit analysis, 47–77
efficiency approach to, 62–63
fair allocation, 193–220
GDP (gross domestic product), 21–41
(p. 958) happiness-based policy analysis, 286–311
inequality and poverty measures, 82–122
multidimensional indicators of inequality and poverty, 246–280
overview of Handbook chapters, 3–10
QALY-based cost-effectiveness analysis, 160–185
social ordering functions, 227–243
social welfare functions, 126–156
policy-relevant measurement methodology
AF class measurement, 633–634
Bhutan’s GNH index, 248, 615, 634–636
dual-cutoff counting methodology, 631–632
goals for, 630–631
overview, 636–637
political feasibility, 49–50
Politics (Aristotle), 394
pollution, costs of, 70
population monotonicity, 200, 203–206, 218–219
population principle, 87
population replication invariance (PRI), 278
population replication principle (PRI), 280
postapplication relational axioms, 200–201
poverty, measurement of
child poverty, 673
concerns about current measures, 646–652
European Union policy, 247n1
feminist, pro-poor approach, 650t, 652–667, 664t, 666f, 668t, 669t
framework for, 83–86, 84f, 85f
future research needed, 671–673
multidimensional indicators of, 246–280, 677–707
multitopic survey trial in Philippines, 667–671
need for new and better measures, 645–646
overview, 82
poverty-evaluation function, 112
principles of, 108–115, 114f
ranking, 115–122
SOF approach to, 238–239
predictors, 409
preference inconsistency
decision conflict, 846–850
decision weights, 850–854
implications for rationality and well-being, 860–862
intuitive nature of choice, 862–863
multiple selves, 857–860
overview, 844–845
policy implications of, 863–865
role of affect in, 863–864
separate vs. comparative evaluation, 854–857
valuation and framing effects, 845–846
preferences
adaptive preferences, 622–623
assessing valuation methods, 290–292
bare objective list account (BOL) and, 601–605
capability approach on, 625–630
as choice, 323
defined, 195
egoistic, 823
extended, 136–137
pitfalls in relying on, 48
preference-based views of well-being, 288–292. See also well-being preferentialism
preference relations and SWFs, 127–130
revealed-preference approach, 68, 289
social ordering functions and, 227–228
stated-preference approach, 68, 289–290
symmetric on time, 163
utility function for, 50
weakly separable, 58
welfare-dominance under preference replacement, 212, 218–219 See also extended preferences; well-being preferentialism
preferentialism
satisfaction, 323–324, 328–330, 333, 333n8, 342
well-being, 321–345
present discounted value (PDV), 776
prevention profiles
behaviors, 888–891
policies, 891–894
(p. 959) price indices, consumer vs. producer, 29–30
primary goods, assessment of equity and, 748
primary labor, 22–23
Principia Ethica (Moore), 380
principle of acceptance, 484
principle of consumers’ sovereignty, 482
Principle of Population, 872
prioritarianism
continuous, 143, 487, 492
defined, 663, 905
formula for, 919
formulation of, 905n2
future generations and, 909–910
implications of, 906
policy assessment methods, 64
poverty measurements and, 672
priority-augmented object allocation, 220
priority data, 195
social welfare functions and, 5, 5n3, 6n4
private benefit function, 53
private goods, 829–830, 834–835
producer price indices, 29–30
production, fair allocation and, 206–210, 209f
production boundary, 25
production technology, 37
production-theoretic framework, 32–33
productivity-adjusted envy-free allocations, 206
project risk, 71–72
proportional rules, 213
protest values, 291
public goods
conditional sharing rules, 830–832
defined, 220
GDP and, 26–27
and Lindahl prices, 832–833
punctual requirements, defined, 196
purchaser price indices, 29–30
purchasing power parities (PPPs), 647, 806–807
QALYs (quality-adjusted life years)
benefits and drawbacks of, 185
cost-benefit analysis and, 70–71
cost-effectiveness analysis based on, 175–185
happiness-based policy analysis and, 291–301
history of, 160–162
measurement of, 170–175
theoretical foundation of, 162–170
quality change, 29–30
quantity-based measures, 53
quasi-linear social choice, 219
quasi-ordering, 86n3
question ordering, of SWB questions, 438–440
rank-dependent transformations, 735
ranking
first- and second-order dominance, 117–120, 119f
meta-analysis, 116–117
overview, 115–116
significance for welfare, inequality, and poverty, 120–122
Rationality and Freedom (Sen), 628
ratio scale invariance (RSI), 252, 278, 280
ratio-scale measurability, 134–135
real income, 32–33, 63
reduced risk of death, 69–70
reference point approach, 97–100
“regrettables,” 22, 31
relative inequality indicators, 252
replication invariance, 204–205, 212
Republic (Plato), 394
resource equality, social ordering functions and, 227, 230, 234
resource monotonicity, 200, 203–204
resources
capability approach and, 620–621
defined, 195
resource upper hemi-continuous, 212
restricted comparisons, 324
restricted profit function, 29n12
revealed preferences
happiness-based policy analysis and, 289–291
pitfalls in relying on, 48
willingness to pay, 68
revenue function, 29–30
Ricardian Equivalence Hypothesis, 73n11
(p. 960) risk
project risk, 71–72
reduced risk of death, 69–70
risk aversion, 166
risk neutrality
with respect to duration, 163
with respect to life years, 163
tests for, 166
in well-being, 512–513
risk-pooling/spreading, 72
risk premium, 71
robustness principle, 201, 230–232, 779
rules, 194, 196–202
sadistic pleasure, 381
same-number problems, 873
Samuelson rule, 58
satisfaction preferentialism, 323–324, 328–330, 333, 333n8, 342
satisfied preferences, 330
scale independence, 90, 93, 94f
scale invariance, 90, 90f, 685
scale-invariant inequality measures, 90–92
Scitovsky set, 59
second-order dominance, 118–120, 119f
Second Theorem of Welfare Economics (Arrow), 57
self-duality property, 214–215
self-fulfillment, 360, 393
selfishness, 394
self-sacrifice, 337
sensitivity to multiple deprivation (SMD), 689–696, 699
sensory hedonism, 351
sequencing effects, 169, 291
serial dictatorship, 144
set point theory of happiness, 430–431
set-valued approach, 479, 479n7
severity argument, 177
shadow exchange rate, 56
shadow prices, 54–56, 56n2, 67
shape of a life, 356–357
Shareability axiom, 488–489
sharing the benefits of diversity, 197
sharing the burden of diversity, 197
similarity postulate, 136
similarity transform, 134n14
Simple, Sovereignty-Respecting (SSR), 459
single-attribute formulation (UPDT), 687–689, 688f, 689f
single-parameter Gini ordering, 142
single peaked preferences, 210–212
single-valuedness, defined, 194
Social Aggregation Theorem, 712–713, 718, 719–729, 721n20, 722n22, 733–736
social alternatives, 128
social choice theory
aim of, 194
vs. fair allocation theory, 193
social discount rate, 73–74
social evaluation functions
egalitarianism and ex ante vs. ex post welfare, 731–734
historical background, 711–713
Impartial Observer Theorem, 714–719
inequality measurements and, 104, 104f
Social Aggregation Theorem, 719–723
solutions to ex ante vs. ex post equality, 734–739
subjective probability and ex ante vs. ex post welfare, 723–731
social expenditure function, 33–34
social income, and social welfare, 23
social ordering functions (SOF)
approaches compared, 240–242
characterizing features of, 242–243
defined, 228
egalitarian-equivalent, 233f
vs. fair allocation, 229
fairness in, 229–235
overview, 227–229
policy evaluations based on, 235–239, 237f
Walrasian, 234f
social transfers in kind, 36
social welfare
defined, 25
relationship to GDP, 25–30
social welfare functions (SWF)
alternative measurability and comparability, 133–135
Arrovian, 126, 144–147
axiomatic characterizations of, 150–154
Bergson-Samuelson, 126–127, 137–139, 240
(p. 961) critical-level generalized utilitarian, 144n29
defined, 139
examples of orderings, 141–144
extended preferences and, 477–480
extensive social choice, 154–155
in inequality measurement, 100–101
informationally invariant orderings, 139–141
intergenerational, 73–75
issues for consideration, 155–156
meaningful utility comparisons, 131–132
overview, 126–127
possible bases for utility comparisons, 135–137
preference relations and, 127–130
properties of, 64
transformed utilitarian, 143
utilitarian, 483–484
and welfarism, 147–150
social welfare orderings
defined, 139
examples of, 141–144
informationally invariant, 139–141
social welfare weights, 63–67
solidarity, choice correspondences and, 199
‘Solow residual,’ 39n28
Sovereignty Respect axiom, 497–498
standard gamble (SG) method, 170–175, 460
stated preferences, 68, 289–291
Stiglitz-Sen-Fitoussi Commission, 441, 615, 618–619, 624–630
stochastic dominance, multivariate, 248
stock measures, 23
strategic bias, 291
strong focus (SFC), 267, 280, 686
strong test, 60–62, 109n10
Structure of Outcomes and Moral Assessment axiom, 486–488
subgroup additivity (SA), 686–687
subgroup decomposability (SDE), 258, 279
subgroup decomposability (SUD), 268, 280, 632, 636
subjective probability, and ex ante vs. ex post welfare, 723–731
subjective well-being (SWB)
challenges related to valuation, 303–311
cognitive vs. affective evaluation of, 404
components of, 410–413
critiques of, 413–419
derivation of valuation, 301–303
Easterlin paradox and, 428–431
in economics, 424–428, 431–435
vs. equivalent income, 464–467
vs. eudaemonic approaches, 370–372
hallmark characteristics of, 403–404
vs. happiness, 403
hedonic vs. evaluative well-being, 435–437
information requirements, 559–561
as a measure of individual well-being, 518–548
mental state approach to, 347–373
methodological issues, 437–440
policy applications, 440–445
psychological research on, 404–406
rise in scholarship concerning, 1–2
as subjective vs. objective evaluation, 406–410
SWB value, 297
use in psychology, 419–420
utility, happiness and, 621–624
valuation of, 288, 293–301, 293f
well-being preferentialism and, 321–345
subsequent welfare position, 288
sufficiency cutoff, 635
sum-ranking procedure, 175–176
sustainable welfare, 31
symmetry (SYM), 164, 263, 278, 279, 684
Sympathy Connection axiom, 492–494
synchronic preferences, 340
System of Integrated Environmental and Economic Accounts (SEEA), 25, 31
System of National Accounts (SNA), 21–25
Talmud rule, 213
technology monotonicity, 200, 208–210
Theil index, 3, 8, 91n7, 95, 251, 258, 639, 763, 767, 769, 771t
Three-Stage Well-being Valuation (3S-WV), 308–310
time trade-off (TTO), 170–175
TIP curves, 120–122
Tracking Condition, 495, 496f, 512–513
trades, problems of fair division and, 205
transfer principle, 87, 98–100, 231–232
(p. 962) transform function, 130n5
transitivity, 807–809
translation independence, 93, 94f
translation-invariant inequality measures, 92–93
translation scale invariance (TSI), 253, 278
T-transformation, 254
“two properties are dual” concept, 215
“two rules are dual” concept, 214
two-stage aggregators, 155
two-stage least squares (2qSLS), 308
Uncertain Glory (Drèze and Sen), 628
unfair rearrangement principle (UR), 257, 258f, 279
uniform majorization principle (UM), 254–255, 279
uniform Pigou-Dalton transfers principle (UPD), 254, 278
uniform rule, 211
uninformed preferences, 333–335
union method of identification, 266
unitary approach, to household welfare, 824
unit consistency (UCO), 252–253, 278
upper bounds, defined, 196
US National Income and Product Accounts, 27
utilitarianism
assessment of equity and, 747–749
average rule of, 714, 714n4, 720, 918
capability approach and, 621–624
characterization of, 153–154
classical, 131
comparisons of preference strength, 722
critical-level generalized utilitarian, 919
criticisms of, 629, 713, 748
discounted, 906
extended preferences and, 483–484
extensive, 154
future generations and, 906, 909–910
happiness, SWB and, 621
hedonic, 622
lifetime well-being and, 874, 885, 892
objective goods and, 388, 390
rational moral deliberation and, 484, 484n13
Social Aggregation Theorem and, 720, 720n18
social welfare ordering by, 141–143
vs. substantive well-being theories, 322
total, 919
unweighted QALY, 176
welfarism and, 241
utility
alternative measurability/comparability, 133–135
decision, 292
defined, 129
dynastic utility function, 73
experienced, 292
happiness-based policy analysis and, 288–292
meaningful comparisons, 131–132
measurement of, 48
money-metric, 52–53, 233, 234f, 454, 829, 833–834
possible bases for comparison, 135–137
utility independence, 162–165
utility function, 50–51, 129, 481
utility independence, 162–163
valence of attitudes, 326–327
value added
captured by GDP, 26
maximum, 29–30
measurement of, 22
scope of, 30
value of life, 69–70
value of time saved, 68–69
variable profit function, 29n12
variety, 387–388, 387f
virtue-based arguments, 394
visual analog scale (VAS), 170–176
vNM utility function. See Neumann–Morgenstern (vNM) function
weak axiom of revealed preference (WARP), 621–622
weak focus (WFC), 267, 280, 684
weakly population monotonicity, 218
weakly separable preferences, 58
weak object-monotonicity, 218
weak test, 60–62, 109n20
wealth
link to measurement of intertemporal well-being, 38
(p. 963) as measure of social material well-being, 25n6
weighted absolute quantity dissimilarity (WAQD), 815
weighted relative price dissimilarity (WRPD), 815
welfare
aggregate welfare change, 57–67, 59f, 61f
comparative assessment of, 785–818
compensating welfare measure, 288
defined, 25
dominance under preference replacement, 200, 203–204, 212, 218–219
equal for equal preferences, 209
equivalent welfare measure, 288
evaluation of individual, 50–56, 52f, 75–76
household, 821–841
inequality and poverty measures, 120–122
relationship to GDP, 21–30, 40
social welfare weights, 63–67
subjective probability and, 723–7342
subsequent welfare position, 288
sustainable, 31 See also social welfare functions
welfare change measures, 52–53
welfarism
assessment of equity and, 748–749
defined, 127, 240
and social ordering functions (SOF), 240–241
and social welfare functions (SWF), 147–150
and subjective well-being (SWB), 286–287
well-being
of future generations, 901–926
vs. the human good, 379
lifetime, 871–895
well-being, conceptions of
causal variables account of, 135–136
desire-based account of, 325
mental state approaches to well-being, 347–373
objective goods, 379–400
overview of Handbook chapters, 10–11
preference-based views of, 321–345. See also well-being preferentialism
subjective well-being in economics, 424–445
subjective well-being in psychology, 403–420
well-being, measurement of
capability approach to, 615–641
choice of measurement systems, 553–584
empirical comparisons of, 574–582, 582f
equivalent income, 453–471
extended preferences, 476–514
implementation with German SOEP data, 565–574
information requirements for, 555–565, 629–630
main bases for, 129
measuring poverty, 645–675
multidimensional approach to, 588–612, 677–707
overview, 583
overview of Handbook chapters, 11–15
SWB as a measure of individual well-being, 518–548
SWB valuation, 286–311
Well-Being for Public Policy (Diener), 407
well-being hedonism, 327
well-being preferentialism
absolute well-being and monadic attitudes, 326–328
arguments against, 333–343
arguments for, 330–333
comparisons of preference strength, 343–345
object and satisfaction preferentialism, 328–330
overview, 321
problems with standard characterization of, 322–326
as substantive view about well-being, 322
willingness to accept (WTA), 52, 289
willingness to pay (WTP), 48, 51–52, 68, 183–185, 289
within-tranches inequality, 764–765, 764t
World Bank’s International Poverty Line, 647
World Development Report, 247n1
World Happiness Report (Helliwell), 441
worst-off measures, 571t, 574–580, 579t
Young’s parametric rules, 213–215
zero condition, 163