New conditions are derived for relating household financial well-being to household utility. In particular, a one-for-one mapping between the equivalent incomes stemming from subsistence-based utility functions and probabilistic models of financial well-being is established. This is unique in the literature and enables estimates from reduced-form models based on a cumulative distribution function (e.g. probit and logit models) to be given a formal welfare interpretation. In so doing, it is possible to use reduced-form models of well-being to evaluate welfare distortions associated with unobserved heterogeneity in subsistence levels and marginal utilities of consumption. An Australian household-level data set is used as a case study for exploring the distortions associated with unobserved heterogeneity. The results are significant for better understanding the welfare implications of income and transfer policies, and indicate that the failure to account for unobserved heterogeneity results in large welfare distortions. Finally, I show that the distortions are primarily attributable to heterogeneity in subsistence requirements rather than heterogeneity in marginal utilities of consumption.

中文翻译：

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未观察到的异质性的福利含义

将家庭财务福利与家庭效用联系起来的新条件被推导出来。特别是，建立了源自基于生存的效用函数的等价收入与财务福利的概率模型之间的一对一映射。这在文献中是独一无二的，并且能够使基于累积分布函数（例如概率和 logit 模型）的简化模型的估计得到正式的福利解释。在这样做的过程中，可以使用简化形式的福利模型来评估与未观察到的生存水平异质性和消费边际效用相关的福利扭曲。一个澳大利亚家庭级别的数据集被用作探索与未观察到的异质性相关的扭曲的案例研究。结果对于更好地理解收入和转移政策的福利影响具有重要意义，并表明未能解释未观察到的异质性会导致巨大的福利扭曲。最后，我表明，扭曲主要归因于生活需求的异质性，而不是消费边际效用的异质性。