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A new class of measures of the standard of living based on functionings


Human development is about expanding the choices human beings have to lead lives that they value and is captured by its capability sets which consist of various functioning vectors. The standard of living is then reflected in capability sets. This paper proposes some particular ways of measuring the standard of living available either to an individual or a whole country, when the direction of the development of society represented by a reference functioning vector or a reference cone is uncertain. We provide axiomatic characterizations of the various measures proposed.

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Correspondence to Wulf Gaertner.

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Helpful comments by Luc Bovens, Tania Burchardt, Udo Ebert, Prasanta K. Pattanaik, Amartya Sen, and by members of the Human Development Report Office at the UN as well as by seminar participants at the universities of California-Riverside, Göttingen, Heidelberg, Oslo, LSE and Queen Mary College London are gratefully acknowledged. We are also grateful to an anonymous referee of this journal for his constructive criticism and to an associate editor for pointing out an error in an earlier version. We wish to thank Eugenio Peluso and Ernesto Savaglio for allowing us to study some of their unpublished work. Finally, we are grateful to Christian Aumann for preparing the figures of this paper.

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Gaertner, W., Xu, Y. A new class of measures of the standard of living based on functionings. Economic Theory 35, 201–215 (2008).

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