International Comparisons of Living Standards by Equivalent Incomes* |
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Authors: | Marc Fleurbaey Guillaume Gaulier |
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Institution: | 1. University Paris Descartes, FR‐75006 Paris, Francemarc.fleurbaey@parisdescartes.fr;2. Banque de France, FR‐75001 Paris, Franceguillaume.gaulier@cepii.fr |
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Abstract: | We propose a measure of living standards for international comparisons. Based on GDP per capita, the measure incorporates corrections for international flows of income, labor, risk of unemployment, healthy life expectancy, household demography and inequalities. The method for comparing populations that differ in some non‐income dimension consists of computing the equivalent variation of income that would make each population indifferent between its current situation and a reference situation with respect to the non‐income dimension. This is applied to 24 OECD countries. The obtained ranking of countries differs substantially from the GDP ranking. |
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Keywords: | Social welfare money‐metric utility GDP OECD D60 D71 O57 P17 |
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