Natural capital, subjective well-being, and the new welfare economics of sustainability: Some evidence from cross-country regressions
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.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gnègnè, Yacouba, 2009. "Adjusted net saving and welfare change," Ecological Economics, Elsevier, vol. 68(4), pages 1127-1139, February.
- Karl-Göran Mäler & Sara Aniyar & Åsa Jansson, 2009. "Accounting for Ecosystems," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 42(1), pages 39-51, January.
- Azqueta, Diego & Sotelsek, Daniel, 2007. "Valuing nature: From environmental impacts to natural capital," Ecological Economics, Elsevier, vol. 63(1), pages 22-30, June.
- Abdallah, Saamah & Thompson, Sam & Marks, Nic, 2008. "Estimating worldwide life satisfaction," Ecological Economics, Elsevier, vol. 65(1), pages 35-47, March.
- Bruno S. Frey & Alois Stutzer, 2001.
"What Can Economists Learn from Happiness Research?,"
CESifo Working Paper Series
503, CESifo Group Munich.
- Bruno S. Frey & Alois Stutzer, 2002. "What Can Economists Learn from Happiness Research?," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 402-435, June.
- Bruno S. Frey & Alois Stutzer, . "What can Economists Learn from Happiness Research?," IEW - Working Papers 080, Institute for Empirical Research in Economics - University of Zurich.
- Comolli, Paul, 2006. "Sustainability and growth when manufactured capital and natural capital are not substitutable," Ecological Economics, Elsevier, vol. 60(1), pages 157-167, November.
- Geoffrey Heal, 2008. "Climate Economics: A Meta-Review and Some Suggestions," NBER Working Papers 13927, National Bureau of Economic Research, Inc.
- Daniel Kahneman & Robert Sugden, 2005. "Experienced Utility as a Standard of Policy Evaluation," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 32(1), pages 161-181, 09.
- Astra Bonini, 2008. "Cross-National Variation in Individual Life Satisfaction: Effects of National Wealth, Human Development, and Environmental Conditions," Social Indicators Research, Springer, vol. 87(2), pages 223-236, June.
- Di Tella, Rafael & MacCulloch, Robert J. & Oswald, Andrew J., 2001.
"The Macroeconomics of Happiness,"
The Warwick Economics Research Paper Series (TWERPS)
615, University of Warwick, Department of Economics.
- Di Tella, R. & MacCulloch, R.J.: Oswald, A.J., 1997. "The Macroeconomics of Happiness," Papers 19, Centre for Economic Performance & Institute of Economics.
- DiTella, Rafael & MacCulloch, Robert & Oswald, Andrew J., 1999. "The macroeconomics of happiness," ZEI Working Papers B 03-1999, ZEI - Center for European Integration Studies, University of Bonn.
- Ferrer-i-Carbonell, Ada & Gowdy, John M., 2007. "Environmental degradation and happiness," Ecological Economics, Elsevier, vol. 60(3), pages 509-516, January.
- Barbier Edward B & Heal Geoffrey M, 2006.
"Valuing Ecosystem Services,"
The Economists' Voice,
De Gruyter, vol. 3(3), pages 1-6, February.
- Brand, Fridolin, 2009. "Critical natural capital revisited: Ecological resilience and sustainable development," Ecological Economics, Elsevier, vol. 68(3), pages 605-612, January.
- Brereton, Finbarr & Clinch, J. Peter & Ferreira, Susana, 2008. "Happiness, geography and the environment," Ecological Economics, Elsevier, vol. 65(2), pages 386-396, April.
- Welsch, Heinz, 2009. "Implications of happiness research for environmental economics," Ecological Economics, Elsevier, vol. 68(11), pages 2735-2742, September.
- Peggy Schyns, 2002. "Wealth Of Nations, Individual Income andLife Satisfaction in 42 Countries:A Multilevel Approach," Social Indicators Research, Springer, vol. 60(1), pages 5-40, December.
- Yew-Kwang Ng, 2008. "Environmentally Responsible Happy Nation Index: Towards an Internationally Acceptable National Success Indicator," Social Indicators Research, Springer, vol. 85(3), pages 425-446, February.
- Chang, Gene H., 2002. "The cause and cure of China's widening income disparity," China Economic Review, Elsevier, vol. 13(4), pages 335-340, December.
- Helliwell, John F., 2003.
"How's life? Combining individual and national variables to explain subjective well-being,"
Elsevier, vol. 20(2), pages 331-360, March.
- John F. Helliwell, 2002. "How's Life? Combining Individual and National Variables to Explain Subjective Well-Being," NBER Working Papers 9065, National Bureau of Economic Research, Inc.
- Karl-Göran Mäler, 2007. "Wealth and sustainable development: the role of David Pearce," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 37(1), pages 63-75, May.
- Vemuri, Amanda W. & Costanza, Robert, 2006. "The role of human, social, built, and natural capital in explaining life satisfaction at the country level: Toward a National Well-Being Index (NWI)," Ecological Economics, Elsevier, vol. 58(1), pages 119-133, June.
- Welsch, Heinz, 2007. "Environmental welfare analysis: A life satisfaction approach," Ecological Economics, Elsevier, vol. 62(3-4), pages 544-551, May.
- Zak, Paul J & Knack, Stephen, 2001. "Trust and Growth," Economic Journal, Royal Economic Society, vol. 111(470), pages 295-321, April.
- Edward Deci & Richard Ryan, 2008. "Hedonia, eudaimonia, and well-being: an introduction," Journal of Happiness Studies, Springer, vol. 9(1), pages 1-11, January.
- Gowdy, John, 2005. "Toward a new welfare economics for sustainability," Ecological Economics, Elsevier, vol. 53(2), pages 211-222, April.
- Ekins, Paul & Folke, Carl & De Groot, Rudolf, 2003. "Identifying critical natural capital," Ecological Economics, Elsevier, vol. 44(2-3), pages 159-163, March.
- Welsch, Heinz, 2002. "Preferences over Prosperity and Pollution: Environmental Valuation Based on Happiness Surveys," Kyklos, Wiley Blackwell, vol. 55(4), pages 473-94.
- Chiesura, Anna & de Groot, Rudolf, 2003. "Critical natural capital: a socio-cultural perspective," Ecological Economics, Elsevier, vol. 44(2-3), pages 219-231, March.
- Pillarisetti, J.Ram, 2005. "The World Bank's 'genuine savings' measure and sustainability," Ecological Economics, Elsevier, vol. 55(4), pages 599-609, December.
- Kirk Brown & Tim Kasser, 2005. "Are Psychological and Ecological Well-being Compatible? The Role of Values, Mindfulness, and Lifestyle," Social Indicators Research, Springer, vol. 74(2), pages 349-368, November.
When requesting a correction, please mention this item's handle: RePEc:eee:ecolec:v:69:y:2009:i:2:p:380-388. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.