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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.

Most politicians and ethical observers are not interested in pure health inequalities, as they want to distinguish between different causes of health differences. Measures of “unfair” inequality – direct unfairness and the fairness gap, but also the popular standardized concentration index (CI) – therefore neutralize the effects of what are considered to be “legitimate” causes of inequality. This neutralization is performed by putting a subset of the explanatory variables at reference values, for example, their means. We analyze how the inequality ranking of different policies depends on the specific choice of reference values. We show with mortality data from the Netherlands that the problem is empirically relevant and we suggest a statistical method for fixing the reference values.

This chapter aims to quantify and compare inequalities of opportunity in health across European countries considering two alternative normative ways of treating the correlation between effort, as measured by lifestyles, and circumstances, as measured by parental and childhood characteristics, championed by Brian Barry and John Roemer. This study relies on regression analysis and proposes several measures of inequality of opportunity. Data from the Retrospective Survey of SHARELIFE, which focuses on life histories of European people aged 50 and over, are used.

In Europe at the whole, inequalities of opportunity stand for almost 50% of the health inequality due to circumstances and efforts in Barry scenario and 57.5% in Roemer scenario. The comparison of the magnitude of inequalities of opportunity in health across European countries shows considerable inequalities in Austria, France, Spain and Germany, whereas Sweden, Poland, Belgium, the Netherlands and Switzerland present the lowest inequalities of opportunity. The normative principle on the way to treat the correlation between circumstances and efforts makes little difference in Spain, Austria, Greece, France, Czech Republic, Sweden and Switzerland, whereas it would matter the most in Belgium, the Netherlands, Italy, Germany, Poland and Denmark.

In most countries, inequalities of opportunity in health are mainly driven by social background affecting adult health directly, and so would require policies compensating for poorer initial conditions. On the other hand, our results suggest a strong social and family determinism of lifestyles in Belgium, the Netherlands, Italy, Germany, Poland and Denmark, which emphasises the importance of inequalities of opportunity in health within those countries and calls for targeted prevention policies.

We present the results of a questionnaire study with Belgian undergraduate students as respondents. We consider the relationship between people’s direct ethical preferences, their preferences behind a veil of ignorance, and their purely individual risk preferences over income distributions. The results reveal that, although there are important similarities between the three types of preferences, the first and third types form two extremes, while the second type lies in between the other two. Consistency of response patterns with the expected utility (EU) and rank-dependent expected utility (RDEU) models – natural analogues of the social welfare functions most frequently used in the literature on inequality and social welfare – is tested as well. For all three types of preferences the results reveal that, in the considered context, the RDEU model does not add explanatory power to the EU model. However, preferences appear to be relatively well described by some of the basic concepts from non-expected utility theory not usually considered in the income distribution literature.

The emerging literature on experimental methods in connection with economic inequality has shed fresh light on how to think about inequality, how important issues of equality are in comparison with other economic objectives and how individuals incorporate criteria of equality and fairness into their own decisions.