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Natural capital, subjective well-being, and the new welfare economics of sustainability: Some evidence from cross-country regressions

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  • Engelbrecht, Hans-Jürgen
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    Abstract

    The measurement of natural capital and its management during the economic development process are important aspects of the capital approach to sustainable development. However, the assessment of social welfare in terms of genuine savings (or changes in total wealth per capita) is arguably too limited. This paper tries to make a case for the incorporation of subjective well-being measures in debates about sustainable development by exploring the macro-level relationship between subjective well-being and natural capital in a cross-country setting. It is tested whether natural capital per capita is correlated with subjective well-being in a sample of fifty-eight developed and developing countries, using natural capital data from the World Bank's Millennium Capital Assessment. Bivariate regressions indicate that it is. When multiple regression models are estimated that include (a) major country-level determinants of subjective well-being (GNI per capita, social capital, income distribution, unemployment, inflation), and (b) regional dummy variables for ex-Soviet Union and Latin American countries, the positive correlation remains. The role of data outliers is carefully explored, and the sensitivity of the results to the use of alternative subjective well-being measures (i.e. life satisfaction, happiness, and a combined life satisfaction and happiness index) is investigated. This does not change the nature of the results. The findings arguably strengthen the case for a 'new welfare economics of sustainability' that takes subjective well-being measures into account.

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    Bibliographic Info

    Article provided by Elsevier in its journal Ecological Economics.

    Volume (Year): 69 (2009)
    Issue (Month): 2 (December)
    Pages: 380-388

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    Handle: RePEc:eee:ecolec:v:69:y:2009:i:2:p:380-388

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    Web page: http://www.elsevier.com/locate/ecolecon

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    Keywords: Life satisfaction Subjective well-being Natural capital Sustainable development Welfare economics Cross-country analysis;

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    Cited by:
    1. J. Andres Dominguez & Teresa Noronha Vaz, 2011. "Contrasts in the governance structures in the transborder regions Andaluzia -Algarve," ERSA conference papers ersa10p1121, European Regional Science Association.
    2. Taro Ohdoko & Kentaro Yoshida, 2012. "Public preferences for forest ecosystem management in Japan with emphasis on species diversity," Environmental Economics and Policy Studies, Society for Environmental Economics and Policy Studies - SEEPS, vol. 14(2), pages 147-169, April.
    3. Edson Tandoc & Bruno Takahashi, 2013. "The Complex Road to Happiness: The Influence of Human Development, a Healthy Environment and a Free Press," Social Indicators Research, Springer, vol. 113(1), pages 537-550, August.
    4. Alexandre BERTHE (GREThA, CNRS, UMR 5113) & Sylvie FERRARI (GREThA, CNRS, UMR 5113), 2012. "Ecological inequalities: how to link unequal access to the environment with theories of justice?," Cahiers du GREThA 2012-17, Groupe de Recherche en Economie Théorique et Appliquée.
    5. Alexandra Nonnenmacher & Jürgen Friedrichs, 2013. "The Missing Link: Deficits of Country-Level Studies. A Review of 22 Articles Explaining Life Satisfaction," Social Indicators Research, Springer, vol. 110(3), pages 1221-1244, February.
    6. Justyna Matysiewicz, Slawomir Smyczek, 2013. "Knowledge Creation in International Scientific Networks on example NetAware Intensive Programme," Equilibrium, Uniwersytet Mikolaja Kopernika, vol. 8, pages 107-122.
    7. Megan King & Vivian Renó & Evlyn Novo, 2014. "The Concept, Dimensions and Methods of Assessment of Human Well-Being within a Socioecological Context: A Literature Review," Social Indicators Research, Springer, vol. 116(3), pages 681-698, May.

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