Wellbeing inequality in a developing country: from theory to practice

Abstract

The emergence of multiple concept of wellbeing that can be quantified has allowed researchers to move beyond a narrow focus on income and consumption as a primary measure of inequality and poverty. Although analyses of multidimensional wellbeing are increasingly feasible due to the availability of data, the consumption or income is still applied in a number of studies. As a result, the literature on wellbeing remains deficient in two main ways: (1) the use of inappropriate proxies for wellbeing, and (2) ignorance of the interdependency between dimensions of wellbeing. This paper develops a fundamental framework and applies a principal component analysis method for a calculation of the wellbeing level and wellbeing inequality in Vietnam. Our results show that not only the level, but also inequality, of wellbeing increased in the period 1993–1998 and 2002–2008. This challenges the consensus of a moderate level, and stability in, wellbeing inequality using income proxied measures. We argue that empirical studies of wellbeing need to incorporate multiple dimensions in addition to dimensional interdependency characteristic and thus, implementation in the wellbeing analyses of wellbeing using principal component analysis can obtain the unique results of the level and inequality of wellbeing.