An illfare approach to the measurement of unemployment : a reply

In a recent comment on my paper (Paul, 1992), Riese (1999) has tried to show that the value of my illfare index of unemployment based on the distribution of completed spells will be superior than that based on the distribution of interrupted spells. In this note, certain limitations of the distribution of completed spells are pointed out that make it less attractive for empirical analysis. Ideally, the illfare measure should be computed using the distribution of full spells. Since full spells cannot be predicted with any degree of accuracy, the interrupted or completed spell distributions have to be used to compute the illfare measure. But what is important is to know how the value of illfare index based on completed or interrupted spell distributions would compare with that based on full spell distribution. This issue is also addressed in this note.