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A "happiness test" for the new measures of national well-being: How much better than GDP are they?

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  • Delhey, Jan
  • Kroll, Christian

Abstract

Across the globe there is growing skepticism about the usefulness of GDP as a measure of national well-being. Consequently, several alternative quality-of-life (QOL) measures were developed which either aim at healing the GDP, complementing it, or replacing it. This chapter portrays some of these new measures and puts them to a happiness test: compared to the GDP, are the new QOL measures better able to capture what makes people happy and satisfied with their lives? Using data for 34 OECD societies, we can show that from a happiness perspective, there is-surprisingly-little wrong with the GDP, and most alternative QOL measures do not outperform GDP. Yet, one measure actually does a better job: the OECD's Better Life Index which is particularly effective when it comes to predicting subjective well-being in the richest OECD countries. In sum, the chapter demonstrates that a happiness perspective can add important insights along the way to facilitate the search for a new, widely accepted, internationally comparable measure of well-being.

Suggested Citation

  • Delhey, Jan & Kroll, Christian, 2012. "A "happiness test" for the new measures of national well-being: How much better than GDP are they?," Discussion Papers, Research Unit: Inequality and Social Integration SP I 2012-201, Social Science Research Center Berlin (WZB).
  • Handle: RePEc:zbw:wzbisi:spi2012201
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    1. Delhey, Jan & Newton, Kenneth, 2004. "Social trust: Global pattern or nordic exceptionalism?," Discussion Papers, Research Unit: Inequality and Social Integration SP I 2004-202, Social Science Research Center Berlin (WZB).
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    4. Richard Estes, 2010. "The World Social Situation: Development Challenges at the Outset of a New Century," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 98(3), pages 363-402, September.
    5. Mark McGillivray, 2005. "Measuring Non-Economic Well-Being Achievement," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 51(2), pages 337-364, June.
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    7. Niels Lind, 2004. "Values Reflected in the Human Development Index," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 66(3), pages 283-293, May.
    8. Angus Deaton, 2008. "Income, Health, and Well-Being around the World: Evidence from the Gallup World Poll," Journal of Economic Perspectives, American Economic Association, vol. 22(2), pages 53-72, Spring.
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    10. Amal Ray, 2008. "Measurement of social development: an international comparison," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 86(1), pages 1-46, March.
    11. Michael Hagerty & Robert Cummins & Abbott Ferriss & Kenneth Land & Alex Michalos & Mark Peterson & Andrew Sharpe & Joseph Sirgy & Joachim Vogel, 2001. "Quality of Life Indexes for National Policy: Review and Agenda for Research," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 55(1), pages 1-96, July.
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    Cited by:

    1. Ruohong Cai & Neli Esipova & Michael Oppenheimer & Shuaizhang Feng, 2014. "International migration desires related to subjective well-being," IZA Journal of Migration, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-20, December.
    2. Carla Collicelli, 2013. "Subjective Indicators in the Health Sector and Their Usefulness in Policy Making," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 114(1), pages 87-103, October.
    3. Hetschko, Clemens & von Reumont, Louisa & Schöb, Ronnie, 2017. "Embedding as a pitfall for survey-based welfare indicators: Evidence from an experiment," Discussion Papers 2017/8, Free University Berlin, School of Business & Economics.
    4. Christian Kroll & Jan Delhey, 2013. "A Happy Nation? Opportunities and Challenges of Using Subjective Indicators in Policymaking," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 114(1), pages 13-28, October.
    5. Luigino Bruni & Giovanni Ferri, 2015. "oes Cooperativeness Promote Happiness? Cross-country Evidence," Mo.Fi.R. Working Papers 107, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.

    More about this item

    Keywords

    Better Life Index; GDP; happiness; Human Development Index; life satisfaction; national well-being; quality of life;

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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