Short Abstract:

This article aims to propose a multidimensional approach to well-being inequality in a capability framework while at the same time providing a solid theoretical background that justifies the choice of dimensions and weights. The resulting Index will be applied to four European countries from 2005 to 2017.

Long Abstract:

When well-being inequality is concerned, most of the works present in the literature focus on a one-dimensional approach, which is almost universally done by studying a monetary variable1, such as income or wealth. Very few papers considered a multidimensional method, such as

(Decancq & Lugo, 2012) or (Aristei & Bracalente, 2011) and even in those cases, there appeared to be no substantial justification for the choice of variables and weights.

This article aims to propose a multidimensional approach to well-being inequality while at the same time providing a solid theoretical background that justifies the choice of dimensions and weights. The Index will be based on the multidimensional extension of the Atkinson Index by (Maasoumi, 1986) and (Tsui, 1995) and the choice of variables and weights will be made considering Amartya Sen’s Capability Approach and the Constitutional Approach by (Burchi, De Muro & Kollar, 2014), which uses the countries’ constitutions and annexed documents to identify the essential variables for those countries.

This framework will be used to compose the Index, that will be computed of four EU countries, Italy, Germany, France and Spain, using data from the EU-SILC survey, focusing on well-being inequality before and after the Financial Crisis of 2007-2008.

Main results include a general worsening of inequality levels after the crisis but an improvement in the later years; Mediterranean countries fared worse than France and Germany; strong roles in non-monetary inequality and heterogeneity between dimensional inequality, and finally, a sustained gender gap in all cases examined.