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OECD Statistics Working Papers

The OECD Statistics Working Paper Series - managed by the OECD Statistics and Data Directorate – is designed to make available in a timely fashion and to a wider readership selected studies prepared by staff in the Secretariat or by outside consultants working on OECD projects. The papers included are of a technical, methodological or statistical policy nature and relate to statistical work relevant to the organisation. The Working Papers are generally available only in their original language - English or French - with a summary in the other.

Joint Working Papers:

Testing the evidence, how good are public sector responsiveness measures and how to improve them? (with OECD Public Governance Directorate)

Measuring Well-being and Progress in Countries at Different Stages of Development: Towards a More Universal Conceptual Framework (with OECD Development Centre)

Measuring and Assessing Job Quality: The OECD Job Quality Framework (with OECD Directorate for Employment, Labour and Social Affairs)

Forecasting GDP during and after the Great Recession: A contest between small-scale bridge and large-scale dynamic factor models (with OECD Economics Directorate)

Decoupling of wages from productivity: Macro-level facts (with OECD Economics Directorate)

Which policies increase value for money in health care? (with OECD Directorate for Employment, Labour and Social Affairs)

Compiling mineral and energy resource accounts according to the System of Environmental-Economic Accounting (SEEA) 2012 (with OECD Environment Directorate)

English

Beyond GDP

Is there a law of one shadow price?

This paper builds a welfare measure encompassing household disposable income, unemployment and longevity, while using two different sets of “shadow prices” for non-income variables. The valuations of vital and unemployment risks estimated from life satisfaction data (“subjective shadow prices”) and those derived from model-based approaches and calibrated utility functions (“model-based shadow prices”) are shown to be broadly consistent once a number of conditions are fulfilled. Subjective shadow prices appear to be inflated by the downward bias on the income variable in life satisfaction regressions conducted at the individual level, while the latter bias is largely removed when running regressions at the country level. On the other hand, model-based shadow prices are typically underestimated as: i) the valuation of the unemployment risk is assumed to take place under the veil of ignorance (i.e. for a representative agent that has no information on her current or future unemployment situation); ii) the standard model relies on a Constant Relative Risk Aversion (CRRA) utility function, which has no specific relative risk aversion parameter for unemployment and vital risks; iii) the Value of Statistical Life that is used in standard calibration pertains to the adult lifespan while life expectancy at birth covers the entire lifetime.

English

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