Chapter 2

Inequality, Income, and Well-Being

Koen Decancq*,,; Marc Fleurbaey§; Erik Schokkaert,    * Centre for Social Policy Herman Deleeck, University of Antwerp, Antwerp, Belgium Department of Economics, Katholieke Universiteit Leuven, Leuven, Belgium CORE, Université catholique de Louvain, Louvain-la-Neuve, Belgium§ Princeton University, Princeton, NJ, USA


Individual well-being depends not only on income but also on other dimensions of life, such as health, the quality of social relations and of the environment, employment, and job satisfaction. In this chapter we survey the economic literature on how to construct such overall measures of well-being. We distinguish three approaches: the capability (and functionings) approach, ...

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