Article Summaries Essay Example | Topics and Well Written Essays - 250 words

Article Summaries - Essay Example Although different nations have varying prices, measuring their GDPs require the use of same prices (Charles and Klenow 7-9). The authors used Rawls prowess in economics calculate life expectancy, inequality, and other welfare components (Charles and Klenow 10-11). In constructing welfare over time, Charles and Klenow compared how Rawls valued living in the same country but in different years. Using figure 4 and table 3, they correlated welfare and income growth, as well as, displaying a summary of statistics of the same. Between 1980 and 2000, the US has registered an income average growth of 2.04% (Charles and Klenow 23-25). The researchers had to make a number of a number of assumptions from the Rawls utility functions. They checked the robustness of their calculations using alternative specifications of utility and welfare measures. The alternatives they used held up well to account for the differences between income and welfare (Charles and Klenow 29-34) They used various sources of data to perform their calculations. Consumption, as well as, income data for macro calculations was sourced from the Penn World Tables and life expectancy data from the World Bank’s HNPStats database. In addition, the inequality data was sourced from the UNU-WIDER World Income Database (Charles and Klenow 12-15). The micro data was of immense importance because it analyzed working hours and consumption rate for adults and older children in households. The data collected from the Household Survey enabled the researchers to calculate consumption inequality rather than creating assumptions from the income inequality (Charles and Klenow 38-41). The researchers, in particular, found out that the living standards of Western European were 71% for income and 90% for welfare compared to the U.S. This is because people in these countries live long, have equal consumption