This paper describes the evaluation of individual situations in terms of equivalent incomes computed from ordinary income by adding or subtracting various terms of willingness-to pay. It discusses the origin of the approach and its connection with social choice theory and philosophical principles. It also examines the challenges to be addressed for empirical applications of the approach.
Citation: Fleurbaey, M. (2008). ‘Willingness-to-pay and the equivalent approach’, OPHI Working Paper 25, University of Oxford.