Axiomatic measurement of multidimensional well-being inequality: Some distributional questions

Abstract

This paper focuses on two main issues which are crucial for improving on the analysis of multidimensional inequality: the effect of both the dispersion of well-being attributes across individuals and the interaction among attributes on the measurement of multidimensional well-being. To approach these distributional questions we rely on the Atkinson, Kolm, Sen (hereafter AKS) methodology, which defines a multidimensional inequality index consistent with the Pigou–Dalton principle. This index can be decomposed into univariate indexes belonging to the class of AKS indexes, and a residual term accounting for the interaction across dimensions. The empirical application investigates the evolution of inequality in well-being across some EU countries between 1994 and 2001.Since the multidimensional index depends on the values assigned to the parameters, we test the sensitivity of the trend in well-being to the degree of inequality aversion on each dimension. Our empirical results summarize the evolution of inequality for the indicators of well-being considered both separately and jointly, over time and across countries.