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Netherlands beyond GDP: A Wellbeing Index

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  • Rijpma, Auke
  • Moatsos, Michail
  • Badir, Martijn
  • Stegeman, Hans

Abstract

Since the modern conceptualization of GDP (Kuznets, 1934), serious concerns have been raised to point out that it cannot properly represent wellbeing of a society. Despite the recent reaffirmations of these concerns (Stiglitz et al., 2009; OECD, 2011), GDP is still the dominant indicator. While dashboard approaches have their merits, we pursue to advance a composite wellbeing index as an alternative to GDP in measuring the progress of society. This approach here is documented for the Netherlands, though it can be applied to any advanced economy. Care has been taken to address methodological problems that arise from the index compilation exercise by using appropriate international goalposts from the Netherlands’ peer countries. To avoid making subjective choices in choosing the relative weights of various indicators we utilize the weights reported by the users of the OECD’s Better Life initiative from the Netherlands. With respect to the results of the indicator, it turns out that the recent financial crisis took a couple of years more to gradually hit the Netherlands from the various wellbeing angles, compared to GDP per capita. At the same time, in terms of our wellbeing measure, the Netherlands lost over a decade, as in 2015 the wellbeing index remains lower than in 2006.

Suggested Citation

  • Rijpma, Auke & Moatsos, Michail & Badir, Martijn & Stegeman, Hans, 2017. "Netherlands beyond GDP: A Wellbeing Index," MPRA Paper 78934, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:78934
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    File URL: https://mpra.ub.uni-muenchen.de/78934/1/MPRA_paper_78934.pdf
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    References listed on IDEAS

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    1. Simon Kuznets, 1934. "National Income, 1929-1932," NBER Books, National Bureau of Economic Research, Inc, number kuzn34-1, August.
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    4. Romina Boarini & Marco Mira D'Ercole, 2013. "Going beyond GDP: An OECD Perspective," Fiscal Studies, Institute for Fiscal Studies, vol. 34, pages 289-314, September.
    5. Marc Fleurbaey, 2009. "Beyond GDP: The Quest for a Measure of Social Welfare," Journal of Economic Literature, American Economic Association, vol. 47(4), pages 1029-1075, December.
    6. Ravallion, Martin, 2012. "Troubling tradeoffs in the Human Development Index," Journal of Development Economics, Elsevier, vol. 99(2), pages 201-209.
    7. Rafael Di Tella & Robert J. MacCulloch & Andrew J. Oswald, 2003. "The Macroeconomics of Happiness," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 809-827, November.
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    Cited by:

    1. Arnaud Joskin, 2018. "Working Paper 02-18 - Mesurer le bien-être en Belgique - Construction d’un indicateur composite pour mesurer le bien-être actuel des Belges [Working Paper 02-18 - Het welzijn in België meten - Opbo," Working Papers 1802, Federal Planning Bureau, Belgium.

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    More about this item

    Keywords

    wellbeing index; gdp alternative; composite indicator; Netherlands;
    All these keywords.

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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