THE BEST INTERNATIONAL MEASUREMENTS FOR WELLBEING

1         Executive Summary

Currently there has been an increase in awareness of the importance of giving priority to overall wellbeing of a society, when determining its improvement and measuring a country’s development. This report gives a brief on few of the popular wellbeing measures available today. The conclusion would be that Better Life Index and Gross National Happiness are the best measures yet, as they both have a wider scope, so would show the well being more accurately.

2         Wellbeing

Wellbeing has no definite definition, but has being described as the overarching concept of the quality of people’s lives.Samman, 2007, cited in Rees, et al., 2010, claims that there are two approaches in determining wellbeing; hedonic and eudemonic approach. Hedonic or rather subjective wellbeing considers the happiness, life satisfaction, positivity and negativity in life. Whereas psychological or eudemonic wellbeing includes personal development and sense of purpose of people.(Rees, et al., 2010). However some economists say that wellbeing cannot be defined as such, due to it being multi-dimensional(Stiglitz, et al., 2009).

3         Traditional Measure of Wellbeing

For years a country’s development has being measured by the Gross Domestic Product (GDP) of a country. This misguides people that if the GDP per capita of a country is high, that country’s citizens having high living standards.

GDP only reflects the market production in a country. It does not show the environmental damage caused by a society’s consumption and production, nor does it show the impact of this in the future. As said by Robert Kennedy (1968), GDP doesn’t measure the health, education, family life, intelligence, compassion or anything that makes life worth living.

As a result of these limitations economists have come up with many measures over the years, trying to accurately portray a society’s wellbeing.

4     Alternative Measures of Wellbeing

Currently there exists many indices to measure wellbeing, for example the Human Development Index (HDI), Satisfaction with Life Index, Quality of Life Index, The Cantril Ladder, Happy Planet Index, Better Life Index, Gallup-Healthways Well-Being 5, Canadian Index of wellbeing,etc.

4.1       The Cantril Ladder

The Cantril ladder, now excessively used by the Gallup World Poll, was introduced in 1965 by Dr.Hadley Cantril. The Cantril ladder takes the hedonic approach and requires the people to anchor themselves on a hypothetical ladder, where they have to rate their life on a scale of 0 to 10; 0 being the worst possible life, and 10 being the best possible life(Gallup,Inc., 2014).

Even though this measure looks at wellbeing through the society’s eyes, and the index is most likely to reflect people’s environment, it does not directly reflect those factors. Components like health, literacy levels, environmental pollution, crime rates, inequality of income distribution, access to clean water, political stability, and many more affecting an economy’s wellbeing is not considered here.

4.2       Happy Planet Index (HPI)

HPI was introduced in 2006 by the New Economic Foundation in order to measure the sustainable wellbeing of a society(Abdallah, et al., 2012). For example, even if Qatar had the third highest GDP in 2012 (The World Bank, 2014), it had 149^th position on the HPI(New Economics Foundation, 2012). This is due to their highly unsustainable use of non-renewable resources, mainly consisting of oil. HPI considers experienced wellbeing, Life Expectancy and Ecological Footprint, where the country with the smallest ecological footprint is ranked better.

Nevertheless, this measure too is not inclusive of all aspects of wellbeing, but takes the right step towards portraying the sustainability aspect by incorporating the environmental factor in it.

4.3       Better Life Index

Better Life Index was launched in 2011 by the Organisation for Economic and Co-operation Development (OECD) in order to capture the development of a society better in terms of wellbeing.The Better Life Initiative takes into consideration the individual wellbeing and sustainability of wellbeing overtime. The individual wellbeing aspect looks at 2 main components; Quality of Life and Material Living conditions.

Quality of life further explores 9 categories, which are health status, work and life balance, education and skills, social connections, civic engagement and governance, environmental quality, personal security, subjective wellbeing, all of which are essential for good living standards.

Material living conditions is equally important when it comes to wellbeing, because a person without income cannot afford good living standards, like good healthcare, secure homes, good education and healthy food. This takes into consideration 3 components; income and wealth, jobs and earnings, and housing (Durand & Smith, 2013).

4.4       Gross National Happiness (GNH)

GNH is a measure of wellbeing that exists in Bhutan to calculate their development in a more holistic way. This measure was introduced in 1972, by the 4^th king of Bhutan, but the concept of such a measure existed since 1729. They believe that real development in an economy happens when material gains and spiritual gains occurs simultaneously.

Measuring GNH is a complex procedure as it takes into consideration 9 domains, under which 33 indicators exists, and further has 124 variables. The main domains would be; psychological wellbeing, health, time use, education, cultural diversity and resilience, good governance, community vitality, ecological diversity and resilience, and living standards(Ura, et al., 2012). All these would lead to people being categorised as; 0%-49%: Unhappy, 50%-65%: Narrowly happy, 66%-76%: Extensively happy, and 77%-100%: Deeply happy. The benefit of this measure is that now Bhutan’s development would be universal, whereas countries with increasing GDP would be delusional about their development(Sachs, et al., 2013).

5         Conclusion

Wellbeing measures that has been developed over the years does not accurately indicate the all rounded wellbeing and development of a country, but those initiatives are the stepping stone of the combined measures that are available today, like the better life index. Currently various governments and independent organisations are developing measures in order to capture wellbeing more accurately, as they have realised that development is material gain, as well as immaterial gain.

Currently the best measures that take into consideration many dimensions of wellbeing would be Bhutan’s Gross National Happiness and OECD’s Better Life Initiative. All the economies should try to adapt these measures and localize it, so that they too can see the actual development and wellbeing of their society, and take steps to improve their nation.

  

6         Reference

Abdallah, S. et al. (2012) The Happy Planet Index: 2012 Report: A global index of sustainability well-being, London: New Economics Foundation. Available at: http://www.happyplanetindex.org/assets/happy-planet-index-report.pdf[Accessed 26^th May 2014].

Durand, M. & Smith, C. (2013) The OECD Better Life Initiative: How's Life? and the Measurement of Well-being, Hong Kong: International Statistical Institute. Available at: http://www.iariw.org/papers/2013/DurandPaper.pdf [Accessed 26^th May 2014].

Gallup,Inc. (2014) Understanding How Gallup Uses the Cantril Scale: Development of the "Thriving, Struggling, Suffering"Categories. [Online] Available at:http://www.gallup.com/poll/122453/understanding-gallup-uses-cantril-scale.aspx[Accessed 26^thMay 2014].

Kennedy, R (1968) Remarks at the University of Kansas, transcript, John f. Kennedy presidential library and museum. Available at: http://www.jfklibrary.org/Research/Research-Aids/Ready-Reference/RFK-Speeches/Remarks-of-Robert-F-Kennedy-at-the-University-of-Kansas-March-18-1968.aspx [Accessed: 25^th May 2014].

New Economics Foundation (2012) The Happy Planet Index: 2012 Report [ONLINE]. Available at:http://www.happyplanetindex.org/assets/happy-planet-index-poster.pdf[Accessed 26^th May 2014].

Rees, G., Bradshaw, J., Goswami, H. & Keung, A. (2010) Understanding Children's Well-being: A national survey of young people's well-being, London: The Children's Society. Available at: http://www.childrenssociety.org.uk/sites/default/files/tcs/research_docs/Understanding%20children's%20wellbeing.pdf[Accessed 26^th May 2014].

Sachs, J. et al. (2013) World Happiness Report, s.l.: s.n. Available at: http://www.earth.columbia.edu/sitefiles/file/Sachs%20Writing/2012/World%20Happiness%20Report.pdf[Accessed 26^th May 2014].

Stiglitz, J. E., Sen, A. & Fitoussi, J.P. (2009) Report by the Commission on the Measurement of Economic Performance and Social Progress, Paris: Commission on the Measurement of Economic Performance and Social Progress. Available at: http://www.stiglitz-sen-fitoussi.fr/documents/rapport_anglais.pdf[Accessed 26^th May 2014].

The World Bank (2014) GDP per capita(current US$). [Online] Available at: http://data.worldbank.org/indicator/NY.GDP.PCAP.CD?order=wbapi_data_value_2012+wbapi_data_value+wbapi_data_value-last&sort=desc[Accessed 26 May 2014].

Ura, K., Alkire, S., Zangmo, T. & Wangdi, K. (2012) The nine domains and 33 indicators of the GNH index [ONLINE]. Available at:http://www.grossnationalhappiness.com/wp-content/uploads/2012/04/Short-GNH-Index-edited.pdf[Accessed 26^th May 14].