I have this book (Computational Macroeconomics for the Open Economy) and sometimes the authors plot welfare distribution for the household, for example, to access the effect of price stickiness on household welfare.
So I guess in dynare we can just plot the histogram of some welfare variable (W), for example, where:
W=c^(1-siggma)/(1-siggma)+psii*log(1-l)+betta*W(+1)
If there is any other way to compare the welfare of households? Will be glad to know.
The usual way is to use consumption equivalents, i.e. the percentage of steady state consumption households would be willing to give up in order to be indifferent between the economy at hand and one without risk.
Indifferent as used here is with regard to only consumption, right?
The deduction of consumption in steady state is used to make the overall welfare level the same across regimes. It is usually only consumption that is deducted. See e.g. Welfare Comparison