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Methodological dilemmas of the measurement of welfare and poverty
 
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Zakład Statystyki Społecznej, Katedra Statystyki Akademia Ekonomiczna w Krakowie
Publication date: 2020-06-08
 
Problemy Polityki Społecznej 2002;4:97–115
 
ABSTRACT
In this paper, the methodological controversies around welfare comparisons are discussed. Most economists maintain that such comparisons do not sufficient theoretical foundations in contemporary the theory of consumer behaviour. The direct measurement of the utility of income function has been proposed, as a remedy. Two methods of such measurement are presented in the paper. The first one is offered by Leyden economists. They make use of psychometric data from a survey for the estimation of the welfare function in the form of the log-norm al distribution function. In the second method, called as „Cracow method” , the constant inequality aversion utility function is applied. The Cracow method enables the estimation of inequality aversion parameter and equivalence scales. For this purpose, the statistical data in the form of household size and income are only used. In this paper, some empirical results are also presented.
 
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ISSN:1640-1808