International Comparisons of Living Standards by Equivalent Incomes

28 Pages Posted: 15 Oct 2009  

Marc Fleurbaey

Princeton University - Woodrow Wilson School of Public and International Affairs

Guillaume Gaulier

Independent

Date Written: 2009-04

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.

Suggested Citation

Fleurbaey, Marc and Gaulier, Guillaume, International Comparisons of Living Standards by Equivalent Incomes (2009-04). Scandinavian Journal of Economics, Vol. 111, Issue 3, pp. 597-624, September 2009. Available at SSRN: https://ssrn.com/abstract=1489058 or http://dx.doi.org/10.1111/j.1467-9442.2009.01578.x

Marc Fleurbaey

Princeton University - Woodrow Wilson School of Public and International Affairs ( email )

Princeton University
Princeton, NJ 08544-1021
United States

Guillaume Gaulier

Independent ( email )

No Address Available

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