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Valuation and evaluation: measuring the quality of life and evaluating policy

  • Partha Dasgupta
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    This paper is about measuring social well-being and evaluating policy. Part I is concerned with the links between the two, while Parts II and III, respectively, are devoted to the development of appropriate methods of measuring and evaluating. In Part II (Sections 4-7) I identify a minimal set of indices for spanning a general conception of social well-being. The analysis is motivated by the frequent need to make welfare comparisons across time and communities. A distinction is drawn between current well-being and sustainable well-being. Measuring current well-being is the subject of discussion in Sections 5-6. It is argued that a set of five indices, consisting of private consumption per head, life expectancy at birth, literacy, and indices of civil and political liberties, taken together, are a reasonable approximation for the purpose in hand. Indices of the quality of life currently in use, such as UNDP's Human Development Index, are cardinal measures. Since indices of civil and political liberties are only ordinal, aggregate measures of social well-being should be required to be ordinal. In this connection, the Borda index suggests itself. In Section 6 the Borda index is put to work on data on what were 46 of the poorest countries in the early 1980s. Interestingly, of the component indices, the ranking of countries in the sample in terms of life expectancy at birth is found to be the most highly correlated with the countries' Borda ranking. Even more interestingly, the ranking of countries in terms of gross national product (GNP) per head is almost as highly correlated. There can be little doubt that this finding is an empirical happenstance. But it may not be an uncommon happenstance. If this were so, GNP per head could reasonably continue to be used as a summary measure of social well-being, even though it has no theoretical claims to be one. It is widely thought that net national product (NNP) per head measures the economic component of sustainable wel

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    Paper provided by London School of Economics and Political Science, LSE Library in its series LSE Research Online Documents on Economics with number 6657.

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    Length: 76 pages
    Date of creation: Jun 2000
    Date of revision:
    Handle: RePEc:ehl:lserod:6657
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    14. Oswald, Andrew, 1997. "Happiness and Economic Performance," The Warwick Economics Research Paper Series (TWERPS) 478, University of Warwick, Department of Economics.
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    20. Weitzman, Martin L, 1976. "On the Welfare Significance of National Product in a Dynamic Economy," The Quarterly Journal of Economics, MIT Press, vol. 90(1), pages 156-62, February.
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    24. Dasgupta, Partha, 1990. "The Environment as a Commodity," Oxford Review of Economic Policy, Oxford University Press, vol. 6(1), pages 51-67, Spring.
    25. Sefton, J. A. & Weale, M. R., 1996. "The net national product and exhaustible resources: The effects of foreign trade," Journal of Public Economics, Elsevier, vol. 61(1), pages 21-47, July.
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