Equity in Health and Equivalent Incomes

Abstract

We compare two approaches to measuring inequity in the health distribution. The first is the concentration index. The second is the calculation of the inequality in an overall measure of individual well-being, capturing both the income and health dimensions. We introduce the concept of equivalent income as a measure of well-being that respects preferences with respect to the trade-off between income and health, but is not subjectively welfarist since it does not rely on the direct measurement of happiness. Using data from a representative survey in France, we show that equivalent incomes can be measured using a contingent valuation method. We present counterfactual simulations to illustrate the different perspectives of the approaches with respect to distributive justice.

Citation

Schokkaert, E., Van de Voorde, C., Dormont, B., Fleurbaey, M., Luchini, S., Samson, A.-L. and Thébaut, C. (2013), "Equity in Health and Equivalent Incomes", Health and Inequality (Research on Economic Inequality, Vol. 21), Emerald Group Publishing Limited, Leeds, pp. 131-156. https://doi.org/10.1108/S1049-2585(2013)0000021007