Subjective and preference-sensitive multidimensional well-being and inequality

This thesis proposes a comprehensive framework that allows analysis of preference-sensitive well-being and inequality. It draws together complementary aspects of attempts to operationalise a more inclusive and multidimensional definition of well-being, through subjective well-being measurement, social welfare theory, and multidimensional indices of well-being and inequality. Theoretical proposals and empirical strategies are put forward, with illustrations using data from the British Household Panel Survey. Chapter 1 examines the underlying structure of subjective well-being, and the relationship between these subjective components of well-being and commonly targeted objective well-being indicators. A key finding is that subjective well-being follows a time-consistent dual structure of underlying ‘life satisfaction’ and ‘emotional well-being’ components. Additionally, the ‘life satisfaction’ component appears more strongly associated than the ‘emotional well-being’ component to changes in objective indicators of well-being. The ‘preference index approach’, the central proposal of the thesis, is introduced in Chapter 2. Preference comparisons are inspected at the individual and subgroup level, and a preference-sensitive index of multidimensional well-being is proposed. The chapter then uses the results of Chapter 1 to support the use of longitudinal life satisfaction regression to estimate the heterogeneous preferences between objective dimensions of life. Chapter 3 illustrates the properties of the preference index approach in terms of multidimensional inequality analysis. The main contribution is the incorporation of preference inequality as well as distributional inequality, and the ability to quantify their interdependent contributions to overall inequality in multidimensional well-being