Estimating the Social Welfare Function of Amartya Sen for Latin America

The present article establishes a set of empirical approximations related to the theorical formulation of the social welfare function of Sen applied to the Latin-American context between 1995 & 2018, this in order to provide estimates of the welfare trends derived from its original version and the generalized version proposed by Mukhopadhaya (2003a; 2003b). The article equally contributes exploring the long-run relationships among welfare, inequality and income with the panel data methodology. The results indicated that long-run relationships exists among these variables, a higher elasticity on the welfare comes from the income distribution rather than the economic growth, in the short-run, only the economic growth was significant to explain the welfare. Finally, for the Latin American countries the ranking of welfare was done considering the predicted values of welfare at country level with the linear predictions of the econometrical model of the long-run, which matches in terms of behavior and rank in the welfare with the original approach of Sen applied to Latin America.