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Beyond GDP: measuring social progress in Europe
... In constructing the factors, we have followed the methodology proposed by Decancq and Schokkaert (2014), whereby the result of a subject i in a dimension j is the mean of that subject in that dimension. Therefore, the mean of the values of each dimension is calculated, giving results of X1, X2, … , Xn with one value per dimension (see Table 1). ...
... Five factors are obtained that explain 42.151% of the total variance (see Table 2). These are Composition of factors, structure and formulation of the multidimensional index of happiness (MIH) Five factors have been obtained from the EFA and they have been constructed according to Decancq and Schokkaert's (2014) aforementioned methodology, with a range from 0 to 10 for each one. Below, the Multidimensional Index of Happiness (MIH) is presented. ...
... In terms of strengths, it has allowed the proposed model to be validated for the measurement of eudaimonic happiness, including an ethical dimension (Etzioni 1988(Etzioni , 2018Schwartz 2012), with values grouped into altruism and egocentrism, an affective dimension (Bericat 2016;Bericat and Acosta 2021;De Sena and Dettano 2021;Figari and Scribano 2009;Hochschild 1975Hochschild , 1979Huppert and Whittington 2003;Huppert, Baylis, andKeverne 2005, Huppert et al. 2009;So 2009, 2013;Kemper 1978Kemper , 1981Scheff et al. 1977;Scribano 2013;Scribano and Aranguren 2017;Vittersø 2003Vittersø , 2016Vittersø, Oelmann, andWang 2009, Vittersø et al. 2010), with emotional states divided into positive and negative (or distressing), and an evaluative dimension looking at individuals' trust in Source. Decancq and Schokkaert (2014). Authors' reproduction. ...
There are multiple indices based on positive psychology and the economics of happiness for measuring, evaluating and developing social policies. Based on univariable scales, they reflect a more hedonic view rather than a complex perspective on social reality and human behavior, which renders them unfit for purpose in the field of sociology. This paper proposes a multidimensional model that includes social relationships and human happiness, focusing more on eudaimonic than hedonic happiness. It contains an affective dimension, an ethical dimension, and a welfare system’s evaluation dimension. Based on the sociology of emotions, it includes elements from Shalom Schwartz’s theory of values and Jacques Thomassen’s study of societies with consolidated political and welfare systems. The model was validated using an Exploratory Factor Analysis with 28 variables from the European Social Survey (ESS). A multidimensional index is proposed, composed of five factors: the welfare system, positive and negative emotional states, altruism, and egocentrism.
... 1.3 Bienestar, calidad de vida y felicidad: El ámbito de la sociología Como he mencionado anteriormente, son muchos los autores que hacen referencia a cómo las mediciones del PIB y el PNB per cápita resultan insuficientes para evaluar el bienestar general de los individuos, y la relevancia que tiene el modo en el que éstos gestionan su vida en busca de mayor longevidad, prosperidad y felicidad (ib. Kuznets, 1937) (Veenhoven, 2000) (Soubbotina, 2000) (ul Haq 2003/1995 (Sen, 2003) (Decancq & Schokkaert, 2014) (Bericat, 2015:37). ...
... En este sentido, estoy de acuerdo con Decancq & Schokkaert (2014) en la idea relativa a que los/las profesionales de las ciencias sociales tenemos pendiente construir un único indicador que permita medir, analizar y poder comparar la evolución del bienestar socioemocional y la felicidad entre personas y países. ...
The aim of this chapter is to review Well-being Indexes developed by the Social Sciences from those presented in the early 1930s like Gross Domestic Product (Kuznets, 1934) to the more recent ones, such as Happy Life Expectancy (Veenhoven, 1996), Socioemotional Well-being Index (Bericat, 2013), Social Progress Index (Porter, 2013) or Harmony Index (Bell, 2015). My ultimate aim is to relate those Indexes to the concept of happiness in Spain.
The main questions addressed are: Does economic income increases people´s perception of happiness? Does the concept of happiness explain how satisfied people are with their life?
To answer these questions, I review most of the main Happiness Indexes and present 16 of the most significant ones. I also analyze metadata of the European Social Survey Round 6 (ESS, 2012), Gallup World Poll, and recent CIS (Centro de Investigaciones Sociológicas) about measure of Happiness in Spain.
Results show that in the recent years, Happiness became a relevant Index to be measured and social Sciences have a challenge to agree one that permit compare statistics between countries in order to make decisions and develop public policies.
... While the eleven metrics proposed in the BLI mainly refer to functioning (e.g., job and health status), people's freedom to make life choices involves their subjective priorities among the different dimensions. In other words, "the level of well-being of individuals with different preferences" (Stiglitz et al. 2010, p. 143) should be measured considering that people may attach varying importance to different dimensions (Helliwell, 2003;Helliwell, Barrington-Leigh, 2010;Decancq, Schokkaert, 2013). In this context, we propose to estimate to what extent people's priorities drive policy makers towards providing specific representations of multidimensional well-being. ...
One of the most influential measures of multidimensional well-being, the Better Life Index, launched by OECD in 2011, contains a detailed overview of the social, economic, and environmental performances of different countries. Since its launch, a relevant number of empirical studies have been proposed on these data, but the role played by the distance between societal priorities and country-level performance in Better Life Index as well as in multidimensional well-being remains underexplored. We propose to address this issue by means of a multidimensional spatial model. We position the countries in the Euclidean K-dimensional space in which each dimension is a specific aspect of well-being, and we consider each individual's opinion on the same dimensions to calculate the personal optimal point. The distance between the optimal point of well-being and the actual observed point at individual level is the individuals' loss in well-being. We show that the societal loss at country-level is negatively related to the overall well-being and the main indices of quality of democracy. Based on the above evidence, we would argue that a multidimensional spatial framework represents a promising tool for the analysis of the whole class of multidimensional measures of well-being in which a group of individuals expresses the weights individually assigned to a set of dimensions within a pre-established range.
... Decancq et al. (2015a, b) originally suggest the construction of money-metric evaluation of multidimensional welfare, while Schokkaert et al. (2011) focus on income and job satisfaction. Decancq and Schokkaert (2013) and Decancq et al. (2015a, b) follow similar approaches while focusing on social progress and poverty respectively. ...
Applied welfare analyses of redistributive systems nowadays benefit from powerful tax-benefit microsimulation programs combined with administrative data. Arguably, most of the distributional studies of that kind focus on social welfare defined as a function – typically inequality or poverty indices – of household equivalized income. In parallel, economic research has made considerable progress in the measurement of welfare along several dimensions. Distinct but related branches of the literature have attempted (i) to model different behavior (in a way that matter for incidence and redistribution of tax-benefit policies), (ii) to go beyond income, (iii) to better define and estimate equivalence scales, (iv) to open the household black box and measure welfare at the individual level. I suggest a general framework to critically review these streams of literatures and to discuss whether recent advances in each of these fields have been or could be readily operationalized in welfare analyses and policy simulations.
... Although the approach is in theory compatible with heterogeneous preferences at the individual level and the computation of a distribution of equivalent incomes within each country, they only focused on average levels for each country. Decancq and Schokkaert (2013) calculated individual equivalent incomes on the basis of the life satisfaction data from the European Social Survey with as nonincome dimensions health, employment status, quality of social interactions, and personal safety. They introduced these equivalent incomes into a concave social welfare function and compared the social welfare of 18 European countries for the years 2008 and 2010, taking into account the distribution of individual well-being. ...
Individual well-being depends not only on income but also on other dimensions of life, such as health, the quality of social relations and of the environment, employment, and job satisfaction. In this chapter we survey the economic literature on how to construct such overall measures of well-being. We distinguish three approaches: the capability (and functionings) approach, the use of subjective life satisfaction measures, and the calculation of equivalent incomes. We discuss the normative assumptions underlying these three approaches, focusing on two issues: the degree to which individual preferences are respected and where in each approach the boundaries of individual responsibility are drawn. We compare the measurement of inequality in well-being with the use of multidimensional inequality measures. We illustrate the general theoretical issues in three domains of application: measuring the effects of household size and composition in the literature on equivalence scales, valuing publicly provided goods and services, and making international comparisons of well-being involving international purchasing power parity comparisons.
This paper analyses the inequality between the regions of the Organization for Economic 13 Co-operation and Development (OECD) member countries by using stochastic multi- 14 objective acceptability analysis and the associated multivariate Gini index. By consider- 15 ing a large number of possible combinations of weights, the distribution of the potential 16 rankings for each region is used to measure multidimensional inequality both within and 17 between countries. Our results show that beyond the expected two clubs of rich and poor 18 countries, a third group of countries emerges that belongs neither to the top nor to the 19 bottom of the ranking, an outcome that can be attributed to the presence of significant 20 economic differences among regions within those countries. Most of the inequality lies 21 between countries, but regional well-being also significantly varies within the same 22 countries and we find an inverse U-shape connection between regional well-being and 23 its inequality within the OECD member countries.
Although there is a rich and burgeoning theoretical literature on regional (in)stability, its empirical implications remain unclear due to the scarcity of complementary quantitative research. This paper presents simulated experimental findings on spatial heterogeneity in secession proneness across 264 regions belonging to 26 European countries. To do so, it develops a broad model of state fragmentation that reconciles the views of the dominant strands in the literature. In order to apply the model, a novel indicator of regional political distinctiveness is proposed, rooted in the discrepancy between regional and national electoral behavior. Using this new indicator, we show that regional electoral heterogeneity has been on the rise in Europe in the past 40 years, offering an empirical rationale for the simultaneous rise in regionalism that is consistent with contemporary economic thinking on optimal country size. Calibrating our model to the current European situation, we find that Catalonia, Flanders and the Basque country are the regions currently predicted to be the most likely to break away. In line with these results, governments in all three regions have consistently vocalized demands for increased autonomy - or even secession - in recent years. Denmark, Hungary and Slovenia show up as the most secession-robust European countries.
Multidimensional welfare analysis has recently been revived by money-metric measures based on explicit fairness principles and the respect of individual preferences. To operationalize this approach, preference heterogeneity can be inferred from the observation of individual choices (revealed preferences) or from self-declared satisfaction following these choices (subjective well-being). We question whether using one or the other method makes a difference for welfare analysis based on income-leisure preferences. We estimate ordinal preferences that are either consistent with actual labor supply decisions or with income-leisure satisfaction. For ethical priors based on the compensation principle, we compare the welfare rankings obtained with both methods. The correlation in welfare ranks is high in general and reranking is insignificant for 77% of the individuals. The remaining discrepancies possibly pertain to a variety of factors including constraints (health issues, labor market rationing), irrational behavior and alternative life choices to the pursuit of well-being. We discuss the implications of using one or the other preference elicitation method for welfare analysis.
The present report has been commissioned by the Consumers Directorate of DG Justice and Consumers from the Joint Research Centre’s Econometrics and Applied Statistics Unit as part of a broader collaborative effort that aims to extend and revise the statistical indicators, methodology, and presentation of information that underpin both the ‘Consumer Markets’ and the ‘Consumer Conditions’ Scoreboards, within the more general framework of internal market integration. The present document has been conceived to address the refinement and further development of the Consumer Markets Scoreboard (CMS). As a result, the main objectives of this report are twofold:
1. To provide a comprehensive review of the theoretical framework and methodology behind the CMS, and to assess the statistical soundness and robustness of the existing Market Performance Indicator (MPI).
2. To review the empirical tools that can be used to analyse micro-level data on market performance, as perceived and reported by the experienced consumers responding to the Market Monitoring Survey (MMS).
In this light, the report is structured in two parts. The first part commences with a survey of the literature about consumer satisfaction and market performance studies (chapter 1.1), which is divided in three main sections. The first section focuses on the different theoretical approaches and behavioural models that have been proposed to analyse the consumer decision-making process and subsequent satisfaction outcomes. The second section of the literature review focuses on the issue of how to empirically assess consumer satisfaction. Finally, the third section addresses the links between consumer satisfaction and profitability and economic growth.
After the literature review, chapter 1.2 discusses the methodological framework for the assessment of consumer market satisfaction. The theoretical foundations of the assessment and the prospective list of indicators have been revised in line with the findings from the literature review. Additionally, a new component based on the individuals’ subjective perception of the perceived value of the goods or services available in the market has been proposed to further refine the conceptual framework underlying the CMS.
In chapter 1.3, the statistical soundness of the 2014 Market Performance Indicator (MPI) is reviewed and assessed. For that purpose, both descriptive statistics and correlation structure analyses of the components aggregated within the indicator are performed. The results confirm that the statistical structure of the MPI is fairly balanced and that, as expected, the countries’ scores obtained in terms of aggregate markets (goods and services) are correlated.
In the section devoted to the uncertainty and sensitivity analysis of the MPI (chapter 1.4), the starting point for the analysis has been to check to what extent the scores and rankings resulting from the indicator are sensitive to subjective modelling choices, in particular to the choice of weights and the aggregation scheme. As explained therein, the results presented in the current report—based on aggregate data from the CMS 2014—tend to confirm the robustness of the scores and rankings of the MPI across countries and across markets.
The first part of the report concludes with a section (chapter 1.5) which aims to set in a wider context the results from the previous sections and to discuss possible avenues for further analysis.
The general objective of the second part of the report is to explore the heterogeneity in consumer experiences across consumer markets. The first section of the second part (chapter 2.1) presents an overview of studies exploring the sources of heterogeneity in consumer motivation, preferences and behaviour. From chapter 2.2 to chapter 2.4, individual level data from the MMS 2015 are used for the empirical investigation of consumer markets performance as subjectively perceived by consumers themselves. Econometric tools such as multiple linear regression models, logistic regression and multinomial logistic regression have been used to perform the analyses. Explanatory variables in those models are in line with the literature, and include socio-demographic characteristics of survey respondents such as age, gender, education, occupation, internet usage, mother tongue and income. Additional explanatory variables accounting for market specific conditions and cross-country or cross- cultural differences have also been included in the models. The results obtained therein show that socio-demographic characteristics shape consumer assessment of market performance. Regional and cross-country differences have also a significant impact on the results. Furthermore, there is significant evidence that consumers are influenced by the specific conditions encountered in the different markets and assess their consumption experiences within them accordingly.
When looking at socio-demographic trends, results of the multivariate analyses performed on the overall MPI scores indicate that women are statistically significantly more positive than men. The middle age group (35-54 year-olds) is negatively associated with higher MPI scores. People with higher levels of education tend to give significantly more negative scores. Ratings are significantly higher when respondents belong to the categories of housepersons and pensioners, and conversely seem to be the lowest when respondents are self-employed. Both those who never use the internet and those who use it very frequently (daily) assign significantly more positive ratings. Those whose mother tongue is not an official language tend to be more negative in their overall market assessments. Furthermore, negative associations have also been found to be very intense for those consumers in a very difficult financial situation.
With regard to regional differences, overall ratings are significantly lower in the Eastern and Southern regions. On the other hand, ratings appear to be significantly higher when considering Eurozone countries and New Member States. When looking at the different markets and market groupings, goods markets perform significantly better than services when assessed through the overall MPI scores. In general, the assessment of market performance is found to be significantly poorer for those services markets related to clusters such as banking, utilities and telecoms.
However, when analysing the results obtained from the MMS 2015 data, we must also highlight that the situation may differ heavily across the individual components of the MPI (comparability, trust, problems and detriment, expectations and choices). Additionally, outside the realm of the MPI, complaints and switching behaviour are two additional dimensions of market performance included in the MMS 2015 and assessed by survey respondents. Heterogeneity in consumer assessment has also been found in the empirical analyses undertaken on these dimensions.
The second part of the report concludes with a section devoted to summarise the main findings of the empirical analyses.
Finally, a brief summary of overall results and conclusions is presented at the end of the report.
Governments are becoming interested in the concept of human well-being and how truly to assess it. As an alternative to traditional economic measures, some nations have begun to collect information on citizens' happiness, life satisfaction, and other psychological scores. Yet how could such data actually be used? This paper is a cautious attempt to contribute to thinking on that question. It suggests a possible weighting method to calculate first-order changes in society's well-being, discusses some of the potential principles of democratic 'well-being policy', and (as an illustrative example) reports data on how sub-samples of citizens believe feelings might be weighted.
This paper presents the framework used by the OECD for defining and measuring well-being, developed as part of the OECD Better Life Initiative launched in 2011. This framework measures well-being by considering 11 dimensions covering both current material conditions and quality of life, while also recognizing the importance of taking account the sustainability of well-being in the future. This framework has been populated with indicators for each dimension, whose selection has relied on international standards on measurement and was made in consultation with experts and National Statistical Offices of OECD countries. The paper also discusses the pros and cons of various approaches for presenting and disseminating information on multidimensional well-being to different audiences—including the OECD Better Life Index, an interactive web tool. The paper concludes by illustrating the progress made in developing measures of well-being and outlines the statistical agenda ahead to improve existing indicators and develop new ones.
Poverty reduction rests on the mechanisms of horizontal and vertical solidarity and on prevention and repair of social risks. In this contribution, we argue that in contemporary welfare states the poverty-reducing capacity of existing social security systems has inherent limitations. Focusing on Belgium, we present and discuss empirical indications of a persistent (over a period of at least 30 years) decline in poverty reduction through social transfers, particularly among households who are highly dependent on such transfers. Firstly, we show that prevention and repair have failed to contribute to a reduction in the proportion of work-poor households who are highly dependent upon social security and face a high (rising even) poverty risk. Secondly, we find that given the fragmentation of social risks – in terms of both ex post poverty outcomes and ex ante social stratification – horizontal redistributive mechanisms through risk pooling have become less obvious, especially in respect of unemployment. Thirdly, it appears that the mechanisms of vertical solidarity also face inherent limitations. In a final section we summarise some important research questions for the future and potentially worthwhile policy avenues to resolve the question of how social policy-making might succeed in the future where it has failed in the past.
One of the aims of social indicator research is to develop a comprehensive measure of quality-of-life in nations that is analogous to GNP in economic indicator research. For that purpose, several multi dimensional indexes have been proposed. In addition to economic performance, these also acknowledge the nation's success in matters like schooling and social equality. The most current indicator of this type is the 'Human Development Index'. In this approach QOL is measured by input; the degree to which society provides conditions deemed beneficial. The basic problem is that one never knows to what extent the cherished provisions are really good for people.
An alternative is measuring QOL in nations by output, and consider how well people actually flourish. This 'apparent' QOL can be measured by the degree to which citizens live long and happily. This conception is operationalized by combining registration based estimates of length-of-life, with survey data on appreciation-of-life. Life-expectancy in years is multiplied by average happiness on a 0-1 scale. The product is named 'Happy Life-Expectancy' (HLE), and can be interpreted as the number of years the average citizen in a country lives happily at a certain time.
HLE was assessed in 48 nations in the early 1990's. It appears to be highest in North-West European nations (about 60) and lowest in Africa (below 35).
HLE scores are higher in nations that are most affluent, free, educated, and harmonious. Together, these country-characteristics explain 70% of the statistical variance in HLE. HLE is not significantly related to unemployment, state welfare and income equality, nor to religiousness and trust in institutions. HLE does not differ either with military dominance and population pressure.
The conclusion is that HLE qualifies as the envisioned comprehensive social indicator. It has both clear substantive meaning (happy life-years) and a theoretical significance (ultimate output measure). HLE differentiates well. Its correlations fit most assumptions about required input, but also challenge some. The indicator is likely to have political appeal.
Widespread agreement that poverty is a multifaceted phenomenon encompassing deprivations in multiple dimensions clashes with
the vociferous disagreement about how best to measure these deprivations. Drawing on the recent literature, this short paper
reviews three methodological alternatives to the false dichotomy between scalar indices of multidimensional poverty, on the
one hand, and a “dashboard” approach that considers only marginal distributions, on the other. These alternatives include
simple Venn diagrams of the overlap of deprivations across dimensions, multivariate stochastic dominance analysis, and the
analysis of copula functions, which capture the extent of interdependency across dimensions. Examples are provided from the
literature on both developing and developed countries.
Following the report of the Stiglitz Commission, measuring and comparing well-being across countries has gained renewed interest. Yet, analyses that go beyond income and incorporate non-market dimensions of welfare most often rely on the assumption of identical preferences to avoid the difficulties related to interpersonal comparisons. In this paper, we suggest an international comparison based on individual welfare rankings that fully retain preference heterogeneity. Focusing on the consumption-leisure trade-off, we estimate discrete choice labor supply models using harmonized microdata for 11 European countries and the US. We retrieve preference heterogeneity within and across countries and analyze several welfare criteria which take into account that differences in income are partly due to differences in tastes. The resulting welfare rankings clearly depend on the normative treatment of preference heterogeneity with alternative metrics. We show that these differences can indeed be explained by estimated preference heterogeneity across countries – rather than demographic composition.
The definition and measurement of social welfare have been a vexed issue for the past century. This book makes a constructive, easily applicable proposal and suggests how to evaluate the economic situation of a society in a way that gives priority to the worse-off and that respects each individual’s preferences over his or her own consumption, work, leisure and so on. This approach resonates with the current concern to go ‘beyond the GDP’ in the measurement of social progress. Compared to technical studies in welfare economics, this book emphasizes constructive results rather than paradoxes and impossibilities, and shows how one can start from basic principles of efficiency and fairness and end up with concrete evaluations of policies. Compared to more philosophical treatments of social justice, this book is more precise about the definition of social welfare and reaches conclusions about concrete policies and institutions only after a rigorous derivation from clearly stated principles.
In this paper we investigate how age affects the self-reported level of life satisfaction among the elderly in Europe. By using a vignette approach, we find evidence that age influences life satisfaction through two counterbalancing channels. On the one hand, controlling for the effects of all other variables, the own perceived level of life satisfaction increases with age. On the other hand, given the same true level of life satisfaction, older respondents are more likely to rank themselves as "dissatisfied" with their life than younger individuals. Detrimental health conditions and physical limitations play a crucial role in explaining scale biases in the reporting style of older individuals.
In this new edition of his landmark book, Richard Layard shows that there is a paradox at the heart of our lives. Most people want more income. Yet as societies become richer, they do not become happier. This is not just anecdotally true, it is the story told by countless pieces of scientific research. We now have sophisticated ways of measuring how happy people are, and all the evidence shows that on average people have grown no happier in the last fifty years, even as average incomes have more than doubled. In fact, the First World has more depression, more alcoholism and more crime than fifty years ago. This paradox is true of Britain, the United States, continental Europe, and Japan. What is going on? Now fully revised and updated to include developments since first publication, Layard answers his critics in what is still the key book in 'happiness studies'.
Life events-like illness, marriage, or unemployment-have important effects on people. But there is no accepted way to measure the different sizes of these events upon human happiness and psychological health. By using happiness regression equations, economists have recently developed a method.
We estimate happiness regressions using large random samples of individuals. The relative coefficients of income and life events on happiness allow us to calculate a monetary 'compensating amount' for each kind of life event.
The paper calculates the impact of different life events upon human well-being. Getting married, for instance, is calculated to bring each year the same amount of happiness, on average, as having an extra pound 70 000 of income per annum. The psychological costs of losing a job greatly exceed those from the pure drop in income. Health is hugely important to happiness. Widowhood brings a degree of unhappiness that would take, on average, an extra pound 170 000 per annum to offset. Well-being regressions also allow us to assess one of the oldest conjectures in social science-that well-being depends not just on absolute things but inherently on comparisons with other people. We find evidence for comparison effects.
We believe that the new statistical method has many applications. In principle, it can be used to value any kind of event in life.
GDP per capita is usually used to proxy for the quality of life of individuals living in different countries. Welfare is also affected by quantity of life, however, as represented by longevity. This paper incorporates longevity into an overall assessment of the evolution of cross-country inequality and shows that it is quantitatively important. The absence of reduction in cross-country inequality up to the 1990s documented in previous work is in stark contrast to the reduction in inequality after incorporating gains in longevity. Throughout the post–World War II period, health contributed to reduce significantly welfare inequality across countries. This paper derives valuation formulas for infra-marginal changes in longevity and computes a "full" growth rate that
incorporates the gains in health experienced by 96 countries for the period between 1960 and 2000. Incorporating longevity gains changes traditional results; countries starting with lower income tended to grow faster than countries starting with higher income. We estimate an average yearly growth in "full income" of 4.1 percent for the poorest 50 percent of countries in 1960, of which 1.7 percentage points are due to health, as opposed to a growth of 2.6 percent for the richest 50 percent of countries, of which only 0.4 percentage points are due to health. Additionally, we decompose changes in life expectancy into changes attributable to 13 broad groups of causes of death and three age groups. We show that mortality from infectious, respiratory, and digestive diseases, congenital, perinatal, and “ill-defined” conditions, mostly concentrated before age 20 and between ages 20 and 50, is responsible for most of the reduction in life expectancy inequality. At the same time, the recent effect of AIDS, together with reductions in mortality after age 50--due to nervous system, senses organs, heart and circulatory diseases--contributed to increase health inequality across countries.
Over a decade has passed since the collapse of communism, yet citizens of post-communist countries are still far less likely to join voluntary organizations than people from other countries and regions of the world. Why do post-communist citizens mistrust and avoid public organizations? What explains this distinctive pattern of weak civil society? And what does it mean for the future of democracy in post-communist Europe? In this engaging study, Marc Morjé Howard addresses these questions by developing a provocative argument about the powerful and enduring impact of the communist experience on its countries and citizens. Howard argues that the legacy of the communist experience of mandatory participation in state-controlled organizations, the development and persistence of vibrant private networks, and the tremendous disappointment with developments since the collapse of communism have left most post-communist citizens with a lasting aversion to public activities. In addition to analyzing data from over 30 democratic and democratizing countries in the World Values Survey, Howard presents extensive and original evidence from his own research in Eastern Germany and Russia, including in-depth interviews with ordinary citizens and an original representative survey.
There is a widespread consensus that well-being is a multidimensional notion. To quantify multidimensional well-being, information on the relative weights of the different dimensions is essential. There is, however, considerable disagreement in the literature on the most appropriate weighting scheme to be used. Making use of a recent data set for Flanders, we compare various methods to select a weighting scheme. The results are indeed different such that, for instance, a policymaker would identify different groups of individuals as being worst-off depending on the scheme that is chosen. In order to compare and evaluate the weighting schemes, we simulate the support each scheme would get in a hypothetical voting procedure. Weighting schemes that obtain a higher support reflect better the priorities of the respondents themselves and suffer less from the problem of paternalism. Quite remarkably, the popular equal weighting scheme is found to be the least supported in our data set.
Both the potential pitfalls of macro-economic policies focused on stimulating economic growth and the problems involved in
using GDP as a measure of well-being or economic welfare have long been recognized by economists and researchers from other
social sciences. Therefore, it is no surprise that alternative measures for policy-making have been developed and promoted
since the early 1970s. Over the past 5 years, the development of these measures has gained momentum both politically and academically.
However, most research efforts concentrate on the development and promotion of individual indicators, while paying less attention
to the wide range of indicators already available and to theoretical insights. As a result, few classification schemes of
alternative measures exist today to help policy-makers in selecting a proper set of indicators. This paper first looks into
the different classification schemes available in the literature and outlines the weaknesses in each of these. Afterwards,
an alternative classification scheme is introduced that draws on the notions of well-being, economic welfare and sustainability.
A further sub-categorization is built on the different approaches that are used to quantitatively capture the notions. By
focusing on the underlying concepts that the different measures aim to quantify, the alternative classification scheme overcomes
the drawbacks of the existing schemes. Finally, 23 alternative measures for policy-making are reviewed and organized into
the newly developed classification scheme.
Behavioural welfare economics has raised doubts about the use of revealed preferences as an indicator of 'true' individual well-being. Subjective satisfaction ('happiness') measures have become increasingly popular, as they seem to avoid paternalism while at the same time not being dependent on observed choice behaviour. We argue that there is a clash between using subjective satisfaction and respecting preferences, because the former also depends on aspirations. We propose the equivalent income indicator as an alternative cardinalization of the utility function. It does respect preferences but does not depend on aspirations. We apply our general ideas to one specific policy domain: monitoring job quality as individual well-being on the job. Our empirical results about the quality of jobs for school-leavers in Flanders show that the choice of a specific indicator of well-being is highly relevant from a policy point of view. The most popular measures that are in use now (the paternalist equal weights-indicator and subjective job satisfaction) may be misleading if they are not complemented by information about the other indicators. (JEL codes: J28, D63, D71) Copyright The Author 2011. Published by Oxford University Press on behalf of Ifo Institute for Economic Research, Munich. All rights reserved. For permissions, please email: journals.permissions@oup.com, Oxford University Press.
This book is the first in a three-part series, about the common patterns that emerged from the poor people ' s experiences in many different places. Chapter 1 sets out the conceptual framework and methodology. Chapter 2 discusses poverty from the perspective of the poor. Chapter 3 examines poor people ' s experience with the state, and includes case studies of access to health care and education. Chapter 4 addresses the nature and quality of poor people ' s interactions with civil society. Chapter 5 considers the household as a key social institution, and discusses gender relations within households and how these relations affect and are affected by larger institutions of society. Chapter 6 focuses on social fragmentation, and includes a discussion of social cohesion and social exclusion. Chapter 7 concludes the analysis and proposes some policy recommendations. The analysis leads to these conclusions: 1) poverty is multidimensional; 2) the state has been largely ineffective in reaching the poor; 3) the role of nongovernmental organizations (NGOs) in the lives of the poor is limited, forcing the poor to depend primarily on their own informal networks; 4) households are crumbling under the stresses of poverty; and 5) the social fabric - poor people ' s only " insurance " - is unraveling.
We argue that the economic evaluation of health care (cost-benefit analysis) should respect individual preferences and should incorporate distributional considerations. Relying on individual preferences does not imply subjective welfarism. We propose a particular non-welfarist approach, based on the concept of equivalent income, and show how it helps to define distributional weights. We illustrate the feasibility of our approach with empirical results from a pilot survey. Copyright © 2012 John Wiley & Sons, Ltd.
Well-being consists of many dimensions such as income, health and education. A society exhibits greater dependence between its dimensions of well-being when the positions of the individuals in the different dimensions are more aligned or correlated. Differences in dependence may lead to very different societies, even when the dimension-wise distributions are identical. I propose to use a copula-based framework to order societies with respect to their dependence. A class of measures of dependence is derived to which the multidimensional rank correlation coefficient belongs. I illustrate the usefulness of the approach by showing that Russian dependence between three dimensions of well-being has increased significantly between 1995 and 2003. Unfortunately, the aspect of dependence is missed by all composite well-being measures based on dimension-specific summary statistics such as the popular Human Development Index (HDI).
Multidimensional indices are becoming increasingly important instruments to assess the well-being of societies. They move beyond the focus on a single indicator and yet, are easy to present and communicate. A crucial step in the construction of a multidimensional index of well-being is the selection of the relative weights for the different dimensions. The aim of this paper is to study the role of these weights and to critically survey eight different approaches to set them. We categorize the approaches in three classes: data-driven, normative and hybrid weighting, and compare their respective advantages and drawbacks.
Over the past century, there have been striking improvements in health across the earth, including among many of its poorest and initially least healthy people. In India and China, which together include more than one-third of the world's population, life expectancy has increased by more than twenty-five years since 1950. In China, life expectancy now stands at seventy-three years and trails that in Europe by only about three years. Those concerned about health have a great deal to celebrate. The celebration is, however, spoiled by the glaring exceptions, which are clustered in sub-Saharan Africa, where life expectancies are typically in the forties and fifties. Hundreds of millions of individuals will have decades less of life than those who made better choices about where to be born, and their shorter lives will be burdened with more illnesses and disabilities. According to the World Health Report 2000, disability-adjusted life expectancy in Sierra Leone is under twenty-six! Unlike the mass death and suffering caused by the 2010 earthquake in Haiti or the 2004 Indian Ocean tsunami, these global health inequalities seem to me, as to many others, not just a tragedy but also a moral outrage. What distinguishes the world's massive health inequalities from natural disasters is that the inequalities are up to us and consequently, unlike nature, subject to moral judgement. The forces of nature may do catastrophic harm, but they cannot do wrong. They are incapable of evil. © editorial matter and organisation, Patti Tamara Lenard and Christine Straehle, 2012 and the chapters their several authors, 2012.
Recent research shows that health at birth is affected by many factors, including maternal education, behaviors, and participation in social programs. In turn, endowments at birth are predictive of adult outcomes, and of the outcomes of future generations. Exposure to environmental pollution is one potential determinant of health at birth that has received increasing attention. A large literature outside of economics advocates for “Environmental Justice,” and argues that poor and minority families are disproportionately exposed to environmental hazards. I provide new evidence on this question, showing that children born to less educated and minority mothers are more likely to be exposed to pollution in utero and that white, college educated mothers are particularly responsive to changes in environmental amenities. I estimate that differences in exposure to toxic releases may explain 6% of the gap in incidence of low birth weight between infants of white college educated mothers and infants of black high school dropout mothers.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
For more than three decades now, sociologists, politicians and economists have used a wide range of statistical and econometric
techniques to analyse and measure the quality of life of individuals with the aim of obtaining useful instruments for social,
political and economic decision making. The aim of this paper is to analyse the advantages and disadvantages of three possible
methodologies for obtaining synthetic indicators for the area of welfare and quality of life. These methodologies are Principal
Components Analysis, Data Envelopment Analysis and Measure of Distance P2. Furthermore this paper analyses quality of life in the European Union (EU), as a methodological exercise to demonstrate
the principles of calculation, implications and differences between the three indicator-construction approaches. This analysis
is particularly useful in a scene like the EU, immersed in a deep transformation process and with profound cultural, economic
and social inequalities. Therefore, an analysis of the quality of life and well-being of its inhabitants can play a major
role in ironing out such differences.
If human development is “multidimensional” then perhaps we need to discuss what we mean by multidimensional: what is a dimension, and what are the multiple dimensions of interest? This paper develops an account of dimensions of human development, and shows its usefulness and its limitations—both in general and in relation to Amartya Sen's capability approach. The second half of the paper surveys other major “lists” of dimensions that have been published in poverty studies, crosscultural psychology, moral philosophy, quality of life indicators, participatory development, and basic needs, and compares and contrasts them with the account sketched here.
Many economists are becoming supportive of ‘soft’ paternalistic interventions that help people to avoid common decision errors without curtailing individual autonomy. To identify when such interventions could be beneficial, and to assess their success, requires a welfare criterion. However, traditional preference or choice-based criteria cannot serve this function because they assume that whatever people choose makes them better off. An alternative criterion that bases welfare on happiness rather than choice avoids this problem but has several of its own drawbacks. Most notably, people often adapt to serious chronic health conditions, and exhibit high levels of happiness, even though both those with and those without the condition agree that it is much preferable to be healthy. After reviewing different lines of research that shed light on the pros and cons of these alternative welfare criteria, we argue that no simple criterion based on either concept can surmount these problems. Instead, evaluations of welfare will inevitably have to be informed by a combination of both approaches, patched together in a fashion that depends on the specific context.
Social indicators are an important tool for evaluating a country's level of social development and for assessing the impact of policy. Such indicators are already in use in investigating poverty and social exclusion in several European countries and have begun to play a significant role in advancing the social dimension of the EU as a whole. The purpose of this book is to make a scientific contribution to the development of social indicators for the purposes of European policy-making. It considers the principles underlying the construction of policy-relevant indicators, the definition of indicators, and the issues that arise in their implementation, including that of the statistical data required. It seeks to bring together theoretical and methodological methods in the measurement of poverty/social exclusion with the empirical practice of social policy. The experience of member states is reviewed, including an assessment of the National Action Plans on Social Inclusion submitted for the first time in June 2001 by the 15 EU governments. The key areas covered by the book are poverty, including its intensity and persistence, income inequality, non-monetary deprivation, low educational attainment, unemployment, joblessness, poor health, poor housing and homelessness, functional illiteracy and innumeracy, and restricted social participation. In each case, the book assesses the strengths and weaknesses of different indicators relevant to social inclusion in the EU, and makes recommendations for the indicators to be employed. The book is based on a report prepared at the request of the Belgian government, as part of the Belgian presidency of the Council of the EU in the second half of 2001, and presented at a conference on ‘Indicators for Social Inclusion: Making Common EU Objectives Work’ held at Antwerp on 14–15 Sept 2001.
We propose a measure of living standards for international comparisons. Based on GDP per capita, the measure incorporates corrections for international flows of income, labor, risk of unemployment, healthy life expectancy, household demography and inequalities. The method for comparing populations that differ in some non-income dimension consists of computing the equivalent variation of income that would make each population indifferent between its current situation and a reference situation with respect to the non-income dimension. This is applied to 24 OECD countries. The obtained ranking of countries differs substantially from the GDP ranking. Copyright © The editors of the "Scandinavian Journal of Economics" 2009. .
Incl. abstract and bib. Following Amartya Sen, this paper contends that the capability approach provides a better framework for thinking about human well-being and development than more traditional approaches which typically focus on utility or resources. This is illustrated by drawing on the results of a survey which investigated how ordinary people in South Africa view human well-being (a 'good' form of life). However, the results of this exercise indicate that the capability approach overlaps with both utility (happiness, pleasure, etc) and resource-based concepts of well-being. The distinctions between commodities (and their characteristics), human functioning and utility is less robust than Sen implies. In particular, the capability approach needs to make more space for the role of utility (defined broadly to include all valuable mental states) and say more about the material basis of well-being.
During 2006, the Gallup Organization conducted a World Poll that used an identical questionnaire for national samples of adults from 132 countries. I analyze the data on life satisfaction and on health satisfaction and look at their relationships with national income, age, and life-expectancy. The analysis confirms a number of earlier findings and also yields some new and different results. Average life satisfaction is strongly related to per capita national income. High-income countries have greater life-satisfaction than low-income countries. Each doubling of income is associated with almost a one-point increase in life satisfaction on a scale from 0 to 10 and, unlike most previous findings, the effect holds across the range of international incomes; if anything, it is slightly stronger among rich countries. Conditional on the level of national per capita income, the effects of economic growth on life satisfaction are negative, not positive as would be predicted by previous discussion and previous micro-based empirical evidence. Neither life satisfaction nor health satisfaction responds strongly to objective measures of health, such as life expectancy or the prevalence of HIV infection, so that neither provides a reliable indicator of population well-being over all domains, or even over health.
Amartya Sen addresses the question why he is disinclined to provide a fixed list of capabilities to go with his general capability approach. Capability assessment can be used for different purposes (varying from poverty evaluation to the assessment of human rights or of human development), and public reasoning and discussion are necessary for selecting relevant capabilities and weighing them against each other in each context. It would be a mistake to build a mausoleum for a “fixed and final” list of capabilities usable for every purpose and unaffected by the progress of understanding of the social role and importance of different capabilities.
Psychology has recently focused attention on subjective states of pleasure, satisfaction, and what is called "happiness." The suggestion has been made in some quarters that a study of these subjective states has important implications for public policy. Sometimes, as in the case of Martin Seligman's "positive psychology" movement, attempts are made to link the empirical findings and the related normative judgments directly to the descriptive and normative insights of ancient Greek ethics and modern virtue ethics. At other times, as with Daniel Kahneman's work, the connection to Aristotle and other ancient Greek thinkers is only indirect, and the connection to British Utilitarianism is paramount; nonetheless, judgments are made that could be illuminated by an examination of the rich philosophical tradition that runs from Aristotle through to John Stuart Mill's criticisms of Bentham. (c) 2008 by The University of Chicago. All rights reserved..
The aim of this paper is to decompose cross-national differences in self-reported general health into parts explained by differences in 'true' health, measured by diagnosed conditions and measurements, and parts explained by cross-cultural differences in response styles. The data used were drawn from the Survey of Health, Ageing and Retirement in Europe 2004 (SHARE), using information from 22 731 individuals aged 50 and over from 10 European countries. Self-rated general health shows large cross-country variations. According to their self-reports, the healthiest respondents live in the Scandinavian countries and the least healthy live in Southern Europe. Counterfactual self-reported health distributions that assume identical response styles in each country show much less variation in self-reports than factual self-reports. Danish and Swedish respondents tend to largely over-rate their health (relative to the average) whereas Germans tend to under-rate their health. If differences in reporting styles are taken into account, cross-country variations in general health are reduced but not eliminated. Failing to account for differences in reporting styles may yield misleading results.
Direct reports of subjective well-being may have a useful role in the measurement of consumer preferences and social welfare, if they can be done in a credible way. Can well-being be measured by a subjective survey, even approximately? In this paper, we discuss research on how individuals' responses to subjective well-being questions vary with their circumstances and other factors. We will argue that it is fruitful to distinguish among different conceptions of utility rather than presume to measure a single, unifying concept that motivates all human choices and registers all relevant feelings and experiences. While various measures of well being are useful for some purposes, it is important to recognize that subjective well-being measures features of individuals' perceptions of their experiences, not their utility as economists typically conceive of it. Those perceptions are a more accurate gauge of actual feelings if they are reported closer to the time of, and in direct reference to, the actual experience. We conclude by proposing the U- index, a misery index of sorts, which measures the proportion of time that people spend in an unpleasant state, and has the virtue of not requiring a cardinal conception of individuals' feelings.
The paper discusses a methodology for calculating the distribution of gains and losses from a policy change using data for a large sample of households. Estimates are based on the equivalent income function, which is money metric utility defined over observable variables. This enables calculations to be standardised, and a computer program to compute the statistics presented in the paper is available for a general demand system. Equivalent income is related to measures of deadweight loss, and standard errors are computed for each of the welfare measures. An application to UK data for 5895 households is given which simulates a reform that involves eliminating housing subsidies.
Psychologists and sociologists usually interpret happiness scores as cardinal and comparable across respondents, and thus run OLS regressions on happiness and changes in happiness. Economists usually assume only ordinality and have mainly used ordered latent response models, thereby not taking satisfactory account of fixed individual traits. We address this problem by developing a conditional estimator for the fixed-effect ordered logit model. We find that assuming ordinality or cardinality of happiness scores makes little difference, whilst allowing for fixed-effects does change results substantially. We call for more research into the determinants of the personality traits making up these fixed-effects. Copyright 2004 Royal Economic Society.
In normative public economics it is crucial to know how fast the marginal utility of income declines as income increases. One needs this parameter for cost-benefit analysis, for optimal taxation and for the (Atkinson) measurement of inequality. We estimate this parameter using four large cross-sectional surveys of subjective happiness and two panel surveys. Altogether, the data cover over 50 countries and time periods between 1972 and 2005. In each of the six very different surveys, using a number of assumptions, we are able to estimate the elasticity of marginal utility with respect to income. We obtain very similar results from each survey. The highest (absolute) value is 1.34 and the lowest is 1.19, with a combined estimate of 1.26. The results are also very similar for subgroups in the population. We also examine whether these estimates (which are based directly on the scale of reported happiness) could be biased upwards if true utility is convex with respect to reported happiness. We find some evidence of such bias, but it is small¿yielding a new estimated elasticity of 1.24 for the combined sample.
Well-being: aggregate report
- Eurobarometer
Eurobarometer. (2011). Well-being: aggregate report. Eurobarometer Qualitative Studies.
Sponsorshop group on measuring progress, well-being and sustainable development: Final report adopted by the European Statistical System Committee in
European Statistical System. (2011). Sponsorshop group on measuring progress, well-being and sustainable
development: Final report adopted by the European Statistical System Committee in November 2011.
Available on http://ec.europa.eu/eurostat/documents/42577/43503/SpG-Final-report-Progress-wellbeingand-sustainable-deve.
United Nation Sustainable Development Solutions Network
- J Helliwell
- R Layard
- J Sachs
Helliwell, J., Layard, R., & Sachs, J. (2013). World happiness report 2013. United Nation Sustainable
Development Solutions Network.
All on board. Making inclusive growth happen
- Oecd
OECD. (2014). All on board. Making inclusive growth happen. Paris: OECD.