Alternative Measures of Well-being
- Due to the limitations of using national income statistics to measure well-being and compare standards of living, alternative measures of well-being have been developed. These include:
- The OECD Better Life Index
- The Happiness Index
- The Happy Planet Index
- While GDP focusses on production, happiness focuses on health, relationships, the environment, education, satisfaction at work and living conditions
- National incomes statistics tend to present more positive data while national happiness surveys yield more normative data
- There is a link between income and happiness and the Easterlin Paradox is often used to explain it. The paradox states that:
- Happiness and increases in income have a direct relationship up to a point
- Beyond that point, the relationship is less evident
OECD Better Life Index
- The Organisation for Economic and Cultural Development (OECD) has created an index which aims to measure the well-being of citizens in its 38 member countries
- The Better Life Index has 11 variables which it considers essential to the well-being
- Countries are rated on each variable and then comparisons can be made
The Eleven Variables of the OECD Better Life Index
Variable |
Explanation |
Housing |
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Income |
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Jobs |
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Community |
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Education |
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Environment |
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Civic Engagement |
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Health |
|
Life satisfaction |
|
Safety |
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Work-life balance |
|
Happy Planet Index
- The Happy Planet Index (HPI) attempts to measure sustainable wellbeing
- Countries are ranked by how efficiently they deliver long, happy lives using the earth's scarce resources in a sustainable way
- The HPI scores countries with a lower ecological footprint higher countries with more environmental degradation
- The HPI measures a country's progress using three variables
- Wellbeing
- Life expectancy
- Ecological footprint
The top 3 and bottom 3 countries on the HPI in December 2022 (Source: Happy Planet Index)
The Happiness Index
- The Happiness Index is a survey that measures happiness in 10 different areas of a persons life
- Psychological Well-Being
Optimism, sense of purpose/accomplishment - Health
Energy levels and ability to perform everyday activities - Time Balance
Enjoyment, sense of leisure, frequency of feeling rushed - Community
Sense of belonging, volunteer levels, sense of safety in the community - Social Support
Satisfaction with friends and family, feeling loved, and degree of loneliness - Education, Arts, and Culture
Access to cultural and educational events and diversity - Environment
Access to nature, pollution levels, and level of conservation - Governance
Trust in government, sense of corruption, and competency of authorities - Material Well-Being
Financial security and meeting basic needs - Work
Compensation, autonomy, and productivity
(Source: The Happiness Index)