An approximation to the standard of living index: the colombian case (original) (raw)

Social indicators and comparisons of living standards

Journal of Development Economics, 2003

The construction of an international index of standards of living which incorporates social indicators as well as economic output typically involves scaling and weighting procedures which have no foundation in welfare theory. Moreover, elements of GDP which are intermediate inputs into the production of household welfare are often misrepresented as final consumption goods. Revealed preference axioms can be used to make quality-of-life comparisons if it is possible to estimate the representative household's production technology for the social indicators. This method is applied to make comparisons over the components of GDP and life expectancy for a cross-section of 58 countries. Neither GDP rankings, nor the rankings of the Human Development Index, are consistent with the partial ordering of revealed preference. A method of constructing a utility-consistent index incorporating both consumption and life expectancy is suggested.

Problems Related to Measuring and Interpreting Indicators of the Standard of Living

Journal of World Economic Research, 2014

The paper deals with different approaches to measuring living standards. Attention is drawn to income and expenditures recorded in selected countries of the European Union (the United Kingdom, Sweden, Germany, Spain and the Czech Republic). The basic model of linear regression analysis is used to present the curve of the income and expense situation of households. In order to reveal more specific details, analyses based on income quintiles are carried out. The European methodologies EU SILC and COICOP have been chosen as the main source of data. The period of interest was set for years 2005-2013. The article draws attention to ambiguity of commonly used objective indicators of the standard of living while measuring it.

Multivariate poverty index based on the Third National Household Budget Survey 2004-2005 1 ´ Indice de pobreza multivariante a través de la III Encuesta Nacional de

Comunicaciones en Estadísticas, 2016

This study proposes the design of a poverty index using a multivariate approach to create an alternative indicator that combines the bene?ts of the already existing indexes. The construction of such index is based on the data supplied by the Third National Survey of Family Budgets (NFPS) 2004-2005 that contains information on socioeconomic variables of Venezuelan households. We defined eight (8) dimensions with characteristics of households and from there we created an index, which summarizes the information of the different dimensions for measuring poverty. Keywords: poverty rate, national survey of family budgets, principal component analysis, multiple correspondence analysis. Resumen El presente estudio propone diseñar uníndiceuníndice de pobreza usando un enfoque mul-tivariante, para crear un indicador alternativo que conjugue las bondades de losíndices losíndices existentes. La construcción de dichó ındice se basó en los datos suministra-dos por la III Encuesta Nacional de Presupuestos Familiares(ENPF) 2004-2005, donde hay información concerniente a las variables socioeconómicas de los hogares venezolanos. Se definieron ocho (8) dimensiones con características pertinentes al 1 Luzardo, M., Márquez, V., Segovia, H., Rangel. K. Multivariate poverty index based on the Third National Household Budget Survey 2004-2005. Comunicaciones en Estadística, 9(2), 187-210.

Theory and measurement of living levels: Some empirical results for the human development index

Journal of International Development, 1994

In 1990 the United Nations Development Programme (UNDP) published the human development index (HDI), a new measure that provides a means by which inter-country and intertemporal comparisons of living levels can be undertaken. This paper has three objectives. Firstly, the various concepts and measures that can be used for inter-country and intertemporal comparisons are described so as to put this new measure in perspective with respect to the existing literature. Secondly, the conceptual basis of the HDI is described and it is shown that the index actually calculated by UNDP is, in fact, only one of three possible measures of the general conception of human development stated by UNDP. Thirdly, empirical analysis of the two more important measures of the HDI indicates that there are some important differences between the measures. Absolute values and the ranking characteristics of the three measures of the HDI are examined. These differences may be quite important if the HDI is used as an explanatory variable in economic or social analyses.

A new class of measures of the standard of living based on functionings

Economic Theory, 2007

Human development is about expanding the choices human beings have to lead lives that they value and is captured by its capability sets which consist of various functioning vectors. The standard of living is then reflected in capability sets. This paper proposes some particular ways of measuring the standard of living available either to an individual or a whole country, when the direction of the development of society represented by a reference functioning vector or a reference cone is uncertain. We provide axiomatic characterizations of the various measures proposed. Helpful comments by Luc Bovens, Tania Burchardt, Udo Ebert, Prasanta K. Pattanaik, Amartya Sen, and by members of the Human Development Report Office at the UN as well as by seminar participants at the universities of California-Riverside, Göttingen, Heidelberg, Oslo, LSE and Queen Mary College London are gratefully acknowledged. We are also grateful to an anonymous referee of this journal for his constructive criticism and to an associate editor for pointing out an error in an earlier version. We wish to thank Eugenio Peluso and Ernesto Savaglio for allowing us to study some of their unpublished work. Finally, we are grateful to Christian Aumann for preparing the figures of this paper.

Minimum standard of living, a constant of research and social policy work options

The article gives us a true picture of the purchasing power of goods and services from the market. The incomes of many types of customers such as: persons, families, households are a good indicator to measure the poverty in our country, in dynamics, between 1990 and 2013. In the Research Institute for the Quality of Life we used to measure the poverty, using the normative method, which is based on consumption. We calculated two consumer baskets: the consumer basket related to the decent minimum standard of living and the subsistence level consumer basket. We monitored the different types of families in urban and rural areas: active persons and the pensioners. We used equivalence scales in order to calculate the expenditure per household member. The consumer basket is a tool to measure the wealth of poverty of the people from urban and rural areas. Many households have resources below the minimum requirement for a decent living standard as well as below the minimum subsistence standard established by the normative method.

An Integrated Database to Measure Living Standards

Journal of Official Statistics

This study generates an integrated database to measure living standards in Italy using propensity score matching. We follow the recommendations of the Commission on the Measurement of Economic Performance and Social Progress proposing that income, consumption of market goods and nonmarket activities, and wealth, rather than production, should be evaluated jointly in order to appropriately measure material welfare. Our integrated database is similar in design to the one built for the United States by the Levy Economics Institute to measure the multiple dimensions of well-being. In the United States, as is the case for Italy and most European countries, the state does not maintain a unified database to measure household economic well-being, and data sources about income and employment surveys and other surveys on wealth and the use of time have to be statistically matched. The measure of well-being is therefore the result of a multidimensional evaluation process no longer associated w...

Measurement of socio-economic inequality using the Life-Quality Index

Social Indicators Research, 1996

As income inequality presents a narrow view of overall inequality prevailing in a society, the paper focuses on its much broader definition, referred to as socioeconomic inequality, which considers the disparities in income as well as in mortality, and standard of living. The paper presents a new method for measuring the socioeconomic inequality using a composite social indicator, Life-Quality Index, derived from two principal indicators of development, namely, the Real Gross Domestic Product per person and the life expectancy at birth. Income inequality and the associated life expectancy variations are integrated into a quality adjusted income (QAI), to accotmt for the observed differentials in life-quality of various quintiles of the population. The Gini coefficient of the distribution of QAI is introduced as a measure of socioeconomic inequality. The proposed approach is ilhistrated using data on life expectancy of five income quintiles in urban Canada It is found that the maLmimde of inequality in CanadR is higher than that reflected by the traditional measure, the Gini coefficient of income.

Determining the parameters of axiomatically derived multidimensional poverty indices: an application based on reported well-being in Colombia

Quantitative approaches to …, 2008

Somewhat paradoxically Colombians experienced unambiguous improvements in well-being between 1997 and 2003, despite suffering persistent levels of violence and insecurity and going through the worst recession of the last century (1998)-which increased poverty, back to the level of 1988-. This chapter attempts to explain the changes in self-reported well-being with alternative multidimensional poverty indexes-MDPI-of three variables that Colombians identified as public policy priorities during the 1997-2003 period: security-violence, income-poverty, and education. Initial estimates using a MDPI of consumption (as monetary dimension of poverty), education, and security renders mixed evidence to explain improving perceptions of well-being in 2003. However, introducing a more accurate measurement of consumption (one that includes public subsidies of social programs) gives a more consistent picture of the link between changes in well-being and the MDPI. Moreover, the degree of consistency is even larger when the welfare weights of non-monetary dimensions-like education and security-are raised vis-à-vis consumption. The results of this investigation show that parametrizing axiomatically derived MDP indices, while maintaining consistency with evidence on reported well-being of Colombian households, provides a path to derive non-arbitrary weights for the variables included, to avoid arbitrary aggregation procedures, and to reflect more accurately the impact that each dimension of poverty has on the overall wellbeing within the household.