A simplidied model for social welfare analysis : an applications to Spain, 1973-74 to 1980-81

Abstract

Most of the literature on income distribution has been concentrated on inequality. In this paper we introduce also a concern for efficiency in an social welfare model. We propose a simple but useful specification which combines three features: (i) the selection of measurement instruments in the relative and the absolute case on the grounds of their properties for applied work; (ii) a procedure to make welfare comparisons across households with different needs, in a model in which equivalence scales depend only on household size; an (iii) the use of house hold specific statistical price indices to make intertemporal comparisons in teal terms. The methodology is applied to the study of the role of prices and demographic effects in the evolution of the standard of living in Spain from 1973-74 to 1980-81.