Putting measures of individual well-being to use for ex-ante policy evaluation

Publication type:

Journal Article

Authors

Holguer Xavier Jara Tamayo and Erik Schokkaert

Publication date

15 Dec 2017

Abstract

Most studies using microsimulation techniques have considered the effect of potential reforms on the income distribution. However, it has become increasingly recognized, both at the academic and political level, that focusing purely on income provides a limited picture of social progress. We illustrate how ex-ante policy evaluation can be performed in terms of richer concepts of individual well-being, such as subjective life satisfaction and equivalent incomes. Our analysis makes use of EUROMOD, the EU-wide tax-benefit microsimulation model, along with 2013 EU-SILC data for Sweden, which for the first time provides information on life satisfaction. Our results show that the effect of potential reforms varies widely depending on the well-being concept used in the evaluation. We discuss the normative questions that are raised by this finding.

Published in

Journal of Economic Inequality

DOI

https://doi.org/10.1007/s10888-017-9370-x

ISSN

16

Subjects

Economics, Income Dynamics, Well Being and Microsimulation