International comparisons of living standards by equivalent incomes

Marc Fleurbaey, Guillaume Gaulier

Research output: Contribution to journalArticlepeer-review

50 Scopus citations

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.

Original languageEnglish (US)
Pages (from-to)597-624
Number of pages28
JournalScandinavian Journal of Economics
Volume111
Issue number3
DOIs
StatePublished - 2009

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

Keywords

  • GDP
  • Money-metric utility
  • OECD
  • Social welfare

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