Wednesday, April 23, 2014

Atif Mian And Amir Sufi — Inequality in Well-Being

As we mentioned in our post yesterday, economists care much more about inequality in well-being rather than inequality in income or wealth. Data on well-being are more difficult to gather, but we discussed some evidence that inequality in consumption also increased from 1980 to 2010. Consumption directly affects the utility of an individual in most economic models. Income does not.... 
There has been a lot of attention on income and wealth inequality, and for good reason. But inequality in outcomes such as consumption and health are far more important. We’ve gathered some evidence here, but more is needed. The evidence so far suggests that inequality in well-being has tracked inequality in wealth and income closely.
House of Debt
Inequality in Well-Being
Atif Mian And Amir Sufi
(h/t Mark Thoma at Economist's View)


Anonymous said...

Tom -

On a somewhat related note, a post by Charles Hayden on FB:

Long, but interesting read about how SS developed out of corporate attempts to stabilize the workforce and entice older workers to retire, opening things up for younger workers.

Matt Franko said...

Dont tell me the left is now going to propose extracting surplus seratonin from the happy people and redistributing it to the depressed?

Matt Franko said...

"Consumption directly affects the utility of an individual in most economic models. Income does not."

this is a big part of the problem...

Here is an "economic model" I suppose:

GDP = C + S + T

So "income" is not here (as the authors point out) ... then we see the govt increase transfer payments to non-govt (which is not directly accounted for here in the alleged "model") and Consumption is sustained/grows for the recipients of the transfers and even heterodox economists are left scratching their heads like "what happened?!?!"...