Does the Choice of Well-Being Measures Matter in Respecting Human Dignity? Empirical Results from an Indian Slum Survey

Abstract

This study compares and analyzes four leading well-being measures: standard monetary measures (income and expenditure), subjective well-being (life satisfaction), equivalent income, and the Alkire-Foster multidimensional poverty index (MPI). To consistently compare these measures, we conducted a field survey of Delhi’s low- and middle-income respondents in India. Using our dataset, we find that the equivalent income approach tends to ignore the economic value of education because of an adaptive preference problem caused by standard measures of life satisfaction. The MPI approach shows that educational deprivation is prominent in our survey. The results suggest that the MPI may complement traditional income comparisons by appropriately setting components, weights, and deprivation cut-offs. Additionally, we find many violations of the dominance principle in these measures, except for MPI.