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Empirical welfare analysis: when preferences matter
Carpantier, Jean-François; Sapata, Christelle
Universitat Autònoma de Barcelona. Departament d'Economia Aplicada
Fleurbaey and Maniquet have proposed the criteria of conditional equality and of egalitarian equivalence to assess the equity among individuals in an ordinal setting. Empirical applications are rare and only partially consistent with their framework. We propose a new empirical approach that relies on individual preferences, is consistent with the ordinal criteria and enables to compare them with the cardinal criteria. We estimate a utility function that incorporates individual heterogeneous preferences, obtain ordinal measures of well-being and apply conditional equality and egalitarian equivalence. We then propose two cardinal measures of well-being, that are comparable with the ordinal model, to compute Roemer’s and Van de gaer’s criteria. Finally we compare the characteristics of the worst-off displayed by each criterion. We apply this model to a sample of US micro data and obtain that about 18% of the worst-off are not common to all criteria.
Random Utility
Preference heterogeneity
Inequality of opportunity
Labour supply
33 - Economia
Discriminació en el treball
Mercat de treball
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39 p.
Working Paper
Universitat Autònoma de Barcelona. Departament d'Economia Aplicada
Document de treball (Universitat Autònoma de Barcelona. Departament d'Economia Aplicada);13.04

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