Using Efficiency Analysis to Measure Individual Well-being with an Illustration for Catalonia

Abstract

In recent years we have witnessed an increasing interest in the assessment of wellbeing — or of other related concepts such as standard of living or quality of life — from a multidimensional perspective. Certainly, some theoretical developments, such as Sen’s capability approach, together with the increasing availability of individual information on the many dimensions and facets of the concept of well-being, have contributed to the search for reasonable empirical strategies to the measurement of well-being in a multidimensional fashion. Indeed, the different contributions to this volume demonstrate the vitality of research in this field. One such approach is the method originally proposed by Lovell et al. (1994), which basically consists in employing distance functions, a tool typically employed in production economics to measure the distance between a set of inputs and a set of outputs, to the measurement of individual-well-being.

I would like to thank the participants of the UNDP-IPC conference on The Many Dimensions of Poverty, Ada Ferrer-i-Carbonell and Jacques Silber for their comments. The usual disclaimer applies. I would also like to thank IZA for their warm hospitality during my research visit, where this paper was completed. Financial support from the Spanish CICYT Project SEJ2004-07373-C03/01 is gratefully acknowledged.