Title: Copula-based measurement of dependence between dimensions of well-being
Authors: Decancq, Koen
Issue Date: 2009
Publisher: K.U. Leuven, Centrum voor Economische Studiën
Series Title: CES - Discussion paper series 09.24 pages:1-26
Abstract: Well-being consists of many dimensions such as income, health and education. A society exhibits greater dependence between its dimensions of well-being when the positions of the individuals in the different dimensions are more aligned or correlated. Differences in dependence may lead to very different societies, even when the dimension-wise distributions are identical. I propose to use a copula-based framework to order societies with respect to their dependence. A class of measures of dependence is derived to which the multidimensional rank correlation coefficient belongs. I illustrate the usefulness of the approach by showing that Russian dependence between three dimensions of well-being has increased significantly between 1995 and 2003. Unfortunately, the aspect of dependence is missed by all composite well-being measures based on dimension-specific summary statistics such as the popular Human Development Index (HDI).
Publication status: published
KU Leuven publication type: IR
Appears in Collections:Research Center of Public Economics, Leuven

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