Inequality and Multidimensional Well-Being

The world has undergone rapid and tremendous change in the last couple of decades, much of it attributed to some facet of globalization. We have witnessed the collapse of the Soviet Union; conflict and civil wars in many developing nations; the rapid economic progress of many countries in Asia, most significantly China and India; ongoing economic and social decline in sub-Saharan Africa; increased economic uncertainty in parts of Latin America and the Caribbean; and stagnation in many parts of the Pacific. Developed countries have not remained immune to the same global forces. While they have achieved ever higher per capita incomes, and higher well-being according to traditional measures, they have also experienced profound internal change, causing widespread concerns regarding, inter alia, social exclusion, human security, levels of personal satisfaction, and happiness. Thus everywhere we look seems to accord with the view of a global environment that is more dynamic and diverse, and, arguably, more volatile and uncertain. Social science research on living standards, human well-being and quality of life has altered in response to the changing global conditions, new research priorities and improved data resources. Two decades ago, for example, a comparison of living standards across countries was typically accomplished using figures on average incomes converted into U.S. dollars using market exchange rates. Nowadays, a similar exercise would almost certainly take account of variations in purchasing power parity (PPP) between countries, and would also be likely to recognize two other important factors: the non-income dimensions of well-being that contribute to quality of life, and population heterogeneity, which casts doubt on the reliability and relevance of data on average income. The increased recognition of population heterogeneity is reflected in the attention given to the distribution of income and expenditure, both within and among countries. There is now much more information on levels and trends in income inequality, prompted in part by the availability of more comprehensive and reliable data sets, and by greater comparability in national and sub-national