Work in progress

Shaun Da Costa, Koen Decancq, Marc Fleurbaey and Erik Schokkaert (2024), Preference elicitation methods and equivalent income: an overview.

The equivalent income is a preference-based, interpersonally comparable measure of well-being. Although its theoretical foundations are well-established, empirical applications remain limited, primarily due to the detailed data requirements on individuals' preferences across various well-being dimensions. This paper reviews the literature on preference elicitation methods with a focus on estimating equivalent income. We examine several survey-based methods, including contingent valuation, multi-attribute choice or rating experiments, and life satisfaction regressions. The review highlights the advantages and limitations of each method, emphasizing the considerable scope for methodological improvements and innovations.

This paper appeared as PSE Working Paper 2024-60 and as  CSB working paper 2024.09.

Veerle Van Loon and Koen Decancq (2024), Well-BOA: A new preference-based instrument to compare the well-being of older people 

Objectives: Over recent decades, a consensus has emerged recognizing well-being as a multidimensional concept. However, there is no widely accepted operational method to compare the multidimensional well-being of older people. To fill this gap, this paper presents the Well-Being At Older Age (Well-BOA) instrument. Central to the Well-BOA instrument is a factorial survey experiment that estimates older people’s preferences about the relative importance of six well-being dimensions. The empirical implementation of the Well-BOA instrument is illustrated and the resulting well-being ranking is compared to popular “objective” and “subjective” approaches that consider the same six dimensions. Methods: We implemented the Well-BOA instrument using novel data from an online factorial survey experiment among people aged 50 years or older in Flanders (the Dutch-speaking northern part of Belgium). Results: Compared to existing approaches, the Well-BOA instrument led to considerably different well-being rankings of older people. According to the subjective approach, the lower ranked individuals were generally less deprived but in worse states of mental well-being. According to the objective approach, we found that the lower ranked individuals had a lower risk of being deprived in the dimensions of “health” and “income” than according to the Well-BOA instrument. Discussion: This study shows that measurement matters when comparing the well-being of older people. The choice of measurement has important implications for the identification of the worst off in society and for the design of targeted social and aging policies. 

This paper appeared as CSB working paper 24.04.

Begoña Cabeza and Koen Decancq (2023), Social preferences and information about effort and luck: an online survey experiment.

We propose an easily implemented method to compare the level of altruism  of non-parametric social preferences over one’s own and another person’s monetary pay-off. The method was used in an online survey experiment with 573 decision makers to compare the level of altruism of their social preferences and study how much it is affected by randomized information about the effort and luck level of the other person. We find evidence supporting the hypothesis that decision makers become more altruistic when they learn that the other person exerted a high level of effort, and become less altruistic when they learn that the other person was lucky.

This paper appeared as CSB working paper 23.05.

Koen Decancq and Sakura Panagamuwa Gamage (2023), Well-being convergence in the European Union

In this study, a method is proposed to measure well-being inequality and to test for well-being convergence in the EU. The method considers well-being as a multidimensional concept and recognizes that individuals may have different preferences about the relative importance of the different dimensions of well-being. The focus is on interpersonal well-being convergence (i.e., a reduction in well-being inequality between all European citizens) and on intercountry well-being convergence (i.e., a reduction in the well-being inequality between the European countries). To illustrate the method, we use data from EU-SILC (2005-2019) about five dimensions of well-being: income, employment, crime, pollution and health. The relative importance of these dimensions is estimated with a life satisfaction regression. Results show interpersonal and intercountry well-being convergence over the study period, but increased well-being inequality during the Great Recession (2008-2015). Several decompositions are used to shed light on the drivers of well-being convergence in Europe. 

This paper appeared as EU-SOCIALCIT-discussion paper.

Koen Decancq and Annemie Nys (2021) Growing up in a poor household in Belgium: A rank-based multidimensional perspective on child well-being

This article documents some consequences of growing up in a poor household in Belgium. We use data from a specific drop-off module on child well-being in the MEqIn data set, a broad probability-based Belgian household survey. We compare the percentile ranks of children growing up in poor households with children growing up in more favorable income groups (vulnerable, low and high middle class, and rich households, respectively) for several non-monetary dimensions of child well-being. We look at material deprivation, housing quality, physical health, and life satisfaction. Our results reveal a grim picture in which children growing up in poor (or vulnerable) households are not only found at the bottom of the income distribution, but are also more likely to have a low rank in the non-monetary dimensions, with the exception of the physical health dimension. We also use the broad and multidimensional nature of our data to examine the phenomenon of cumulative deprivation, finding that children in poor households are more likely to simultaneously occupy a low rank in all of the well-being dimensions considered. 

This paper appeared as CSB working paper 21.04 .

Decancq K. and Zoli C. (2014) Long term social welfare, inequality and mobility

Recently there has been a growing interest in the empirical association between income inequality and social mobility. Little is known on the normative nexus between both notions, however. In this paper, we axiomatically characterize a family of multiperiod social evaluation functions that allows to include concerns about income inequality and social mobility in a transparent and explicit way. The two core ideas of our characterization are a requirement of consistency of the social evaluation for the addition of an income source with the same mobility structure, and the requirement that the effect of social mobility vanishes when there is no inequality in the society or a subgroup thereof. We obtain a multiperiod rank-dependent social evaluation function that additionally gives a prominent role to the notion of social status in this dynamic context. We discuss various special cases that belong to the characterized family of social evaluation functions, and we present a welfare decomposition that combines in an intuitive way the key components of the evaluation: average income, income inequality and mobility.

This paper appeared as Verona discussion paper 2014/19.