Subjective Income Inequalities

Bernard Van Praag

in Happiness Quantified

Published in print December 2007 | ISBN: 9780199226146
Published online May 2008 | e-ISBN: 9780191718595 | DOI:
Subjective Income Inequalities

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This chapter presents a concept of subjective income inequality based on an extension of the objective income concept. Income satisfaction inequality differs from established measures of inequality using individual perceptions as the basis for making incomes comparable. Traditional measures of inequality introduce subjectivism via intuition by, for instance, imposing OECD-family equivalence scales or by choosing a specific welfare function specification. The introduction of income satisfaction does not imply that the objective measurement should be replaced by subjective concepts, but only that both the objective and subjective approach are complementary to each other.

Keywords: income satisfaction; income inequality; individual-welfare function; subjectivism

Chapter.  9006 words. 

Subjects: Economics

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