CUTTING THROUGH THE

CLUTTER: SEARCHING FOR

AN OVER-ARCHING

MEASURE OF WELL-BEING

JON HALL*,

CHRISTOPHER BARRINGTON-LEIGH**

AND JOHN HELLIWELL**

Introduction

We take as our departure point the now well-re-hearsed ideas that:

1) Societies place too much emphasis on GrossDomestic Product (GDP) as though it were a me-tric of well-being, and

2) Decision-makers would do better by payingattention to more direct measures of well-being,using GDP in its place as a macroeconomic plan-ning tool.

It is, of course, one thing to recognize that a change inbehavior is required, and another to bring about thechange. Indeed, the idea of demoting GDP is notnew. In 1968 Senator Robert Kennedy warned elo-quently about the problems of using Gross NationalProduct (GNP) as a yardstick for America’s pro-gress, concluding that the GNP “measures every-thing, in short, except that whichmakes life worthwhile”. And yet,more than 40 years later, the2009 report of the Sen-Stiglitz-Fitoussi Commission shows thatconcerns remain. Although thelimitations of GDP as a measureof well-being are well known, no

serious challenger has yet emerged to supplement orsupplant it. The public and politicians, through themedia, are bombarded with economic data daily,from the latest stock exchange figures to currencyexchange rates and most, if not all, societies seem along way away from having a public debate that isframed in terms of increasing well-being. Narroweconomic outcomes remain paramount in mostdomestic and international assessments of nationalsuccess. But why is that? And what role can mea-sures of subjective well-being play in the push to gobeyond GDP?

What is well-being?

Before you can search for better measures of well-being, you need to know what it looks like. Whilemost people would agree that well-being is multidi-mensional there are many views on what those di-mensions are and how they should be labeled. TheOECD has suggested that “progress” comprises in-creases in both human and ecosystem well-being(Hall, Giovannini, Morrone and Ranuzzi 2010). Theformer includes health, knowledge and understand-ing, work, material well-being, freedom and self-de-termination and interpersonal relationships, as wellas those institutions and conditions of life that sup-port human well-being (namely the economy, gover-nance and democracy, and culture). Measuring eco-system well-being requires measuring the state ofbiodiversity and its environments (land, freshwater,seas and the atmosphere) (Figure).

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* The Partnership for Statistics for Deve-lopment in the 21st Century (PARIS 21),OECD.** Canadian Institute for Advanced Re-search and Department of Economics, Uni-versity of British Columbia,Vancouver, BC.

Human system

Human Well-being

IndividualWell-being

SocialWell-beingCulture Governance

Economy

Ecosystem

Ecosystemcondition

Resource management

Ecosystemservices & impact

Source: Hall et al. 2010.

Human system

Human Well-being

IndividualWell-being

SocialWell-beingCulture Governance

Economy

Ecosystem

Ecosystemcondition

Resource management

Ecosystemservices & impact

Source: Hall et al. 2010.

THE DIMENSIONS OF WELL-BEING

Figure

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Well-being, therefore, covers a wide range of dimen-sions. It follows that any measure or set of measuresthat seeks to replace GDP should ideally relate to allof the above, otherwise it risks portraying too nar-row a view of the things that matter, one of the criti-cisms leveled at GDP in the first place.

The political economy of information reform

It is not so difficult to be convinced of the intellectu-al case for measuring what matters and focusing onwell-being rather than output. And it is technicallypossible to measure many of the dimensions of well-being outlined above: when taken together, such aset of measures ought to provide a better picture ofnational overall well-being than that offered byGDP. But it is a much more difficult proposition tochange the paradigm in which people debate nation-al well-being. GDP remains the dominant way inwhich a nation’s progress is measured and under-stood (OECD 2009). There are doubtless severalreasons for GDP’s continued dominance, but onereason for its popularity is that it is just one number.It is much easier to interpret changes in GDP (withan increase seen as good and a decrease as bad), orto rank countries according to their level, than tosummarize changes in a multitude of separate indi-cators that might be moving in different directions.

Some proponents of change seek to replace GDP bya set of measures, but GDP has outlived the – nowlargely defunct – “social indicators movement” of the1980s and also appears to have survived the falteringsustainable development indicators movement of the1990s. In both cases the plurality of approaches andthe number of different, and often conflicting, indica-tors, appear to have been important factors in theirfailure to take central places in discussions of nation-al policies and priorities. So, while assessing well-be-ing with a set of measures might seem attractive, sinceit offers many groups the chance to see that their spe-cial interests are supposedly being taken into account,it lacks the power to convince. It seems too compli-cated an approach to capture the hearts and minds ofthe vast majority of people. Perhaps a single numberwould provide a more effective focus for public atten-tion. What might serve that purpose?

The most widely known alternative to the set of indi-cators approach is the composite indicator, whichaggregates the various dimensions of well-being intoa single number. Better-known approaches include

the UNDP’s Human Development Index and theGenuine Progress Indicator (Cobb, Halstead andRowe 1995). But composite indicators remain opento criticism because they must use arbitrary weight-ing to combine the component indicators which willusually be measured in different units – life expec-tancy (in years), income (in purchasing power), in-equality, air pollution (in particles per volume of air),etc. Combining these units poses a fundamental me-thodological (and ethical) problem – namely, thatany composite indicator is based on some judgmentregarding the relative weights to be applied to thecomponents. “Is a one-year increase in average lifeexpectancy to be weighted more heavily than, lessheavily than or equally with a 5 percent decrease ingreenhouse gas emissions?” (Hall 2005). There is adanger that political discussion will focus more onthe choice of weights than on the overall indicator,thereby generating more heat than light in the at-tempt to take the focus away from GDP. They alsorun the risk of oversimplifying a complex system andsending misleading signals.

But is there a single measure of well-being?

In summary, therefore, it seems that GDP will re-main the dominant measure of progress until a singlealternative indicator emerges. To be effective, this sin-gle indicator should embrace a much broader notionof well-being than does any measure of economicactivity. To be accepted it should not be a compositeindicator. But is there a way to summarize well-beingin one number, without requiring an arbitrary weight-ing of component indicators? We would argue, fol-lowing Aristotle’s suggestion, that the strongest can-didate is some overarching measure of how we feelabout our lives. It is a single number that can be col-lected directly through surveys without arbitraryweighting. But it is summary: it depends – to greateror lesser degrees – on all of the other elements in theOECD’s framework for well-being (Hall et al. 2010).

Subjective well-being as a measure of individualand societal well-being

When in doubt about how people feel about theirgovernment, ask them to vote and thereby chooseamong the alternatives on offer. When in doubtabout how satisfied people are with their lives, whynot ask them to assess their life satisfaction, on ascale of 0 to 10? Perhaps because it sounds so simple

and even naive, the possibility of using survey-basedmeasures of subjective well-being (SWB) has onlyrecently started to gain traction in policy-makingdepartments and official statistical offices. Theincreasing support for official collection of measuresof SWB has probably had four sources:

1. Recognition that conventional measures of in-come are insufficient indicators of human and so-cial progress (as argued above, and in Stiglitz, Senand Fitoussi 2009).

2. Recognition that although data can be collectedon a wide variety of other social indicators, thereis no natural way to combine them into an overallindicator of well-being.

3. Accumulating evidence for the validity and relia-bility of SWB data, based primarily on the congru-ence of the responses to different questions, andthe apparent ease with which the data can beexplained by life circumstances widely agreed to beimportant supports for the quality of life (Diener,Lucas, Schimmack and Helliwell 2009, 67–94).

4. Evidence from prospective studies showing thatcurrent levels of SWB are both responsive to cur-rent circumstances and predictive of importantfuture consequences. Importantly, this evidencecomes from both the top and the bottom of therange of SWB. At the top end, those who use morepositive expressions are likely to have longer andhealthier subsequent lives, even under comparablelife circumstances1 than others. At the other end ofthe scale, a large prospective study in Denmark(Koivumaa-Honkanen, Hokanen, Viinamäki, Heik-kilä, Caprio and Koskenvuo 2001) found that menwith the highest degree of dissatisfaction with lifehad average suicide rates over the first ten years ofthe follow-up period 25 times higher than those ofmen who were satisfied with their lives.

Benefits of using life satisfaction as an overarchingmeasure of well-being

First and foremost, measures of life satisfaction pro-vide in one number an individually-based assess-ment that speaks directly to the respondent’s qualityof life. They can be aggregated and averaged in anynumber of ways to measure the average quality oflife in different communities, nations and socio-eco-nomic groups, and to keep track of changes through

time, both for individuals and for groups. Measuresof GDP, by contrast, typically are not available atcommunity or any other sub-national scales. More-over, measures of life satisfaction resonate with thepublic far more than abstract concepts like GDP.Jigmi Y. Thinley, now Prime Minister of Bhutan, putthis well when describing why his nation uses subjec-tive well-being rather than economic activity as theparadigm for development: “The most common goalthat every Bhutanese seeks in life is happiness”(Thinley 2007). The public’s interest in these mea-sures in turn can provoke a rich facts-based debateacross society about the things that matter. Changesin average well-being, or large differences betweenpopulation subgroups, would trigger debate. This de-bate would inevitably look for answers by analyzingthe raft of economic, social and environmental infor-mation that influences overall well-being. And aricher debate makes for a healthier democracy.

Second, measures of life satisfaction enrich the infor-mation from social indicators and economic circum-stances by enabling the direct estimation of weightsreflecting the relative values that individuals, whe-ther on average or in specific demographic groups,communities or nations, implicitly place on differentaspects of life.

Measures of life satisfaction thus meet the threegold-standard conditions: They are equally applica-ble at different levels of aggregation, whether com-munities, regions or nations; they can be monitoredas frequently as needed, and they provide the meansfor explaining how economic, social and institutionalconditions combine to make lives better or worse.

These advantages amplify each other, as data indi-cating some overall change in well-being can be usedin disaggregated form, and even in experimentalcontexts, to understand why some lives are happierthan others and to improve the analysis of the costsand benefits of different policies intended to makelives better.

The role of multiple measures of subjective well-being

Although life evaluations have been shown to con-tain much that is useful and even predictive, they are,like most indicators, sensitive to how and when theyare measured and can shift with circumstances astemporary as today’s weather. Life evaluations, like

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1 For example, life within the same order of nuns (Danner,Snowdon and Friesen 2001) or among eminent academic psycholo-gists (Pressman and Cohen 2007).

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GDP, can be measured in different ways, and thereare good grounds for collecting and comparing dif-ferent measures on an occasional and even a regularbasis. There are three main ways of measuring GDP– via expenditures, incomes and value-added. Mostsystems of national accounts employ at least the in-come and expenditure approaches, and then use avariety of methods to decide how to allocate or in-terpret the inevitable discrepancies.

Similarly, there is some evidence that combining dif-ferent life assessments from the same individual canprovide a more robust indicator, one that can beslightly more accurately explained by underlying lifecircumstances (Helliwell and Barrington-Leigh 2010,Table 10.1). Similarly, it has been shown that life eval-uations, measures of positive affect (positive emo-tions) and negative affect are separable measures ofsubjective well-being, all interesting and useful intheir own ways (Diener et al. 2009, 11–20). Our casefor choosing life evaluations as the primary candi-date for an overarching role is that they are muchmore reflective (than are measures of positive andnegative affect) of the overall circumstances of lifethat are – and ought to be – the principal focus of pub-lic policy (Diener, Helliwell and Kahneman 2010,chapters 1 and 10).

Even an overarching measure of well-being is not acomplete measure of progress

One current limitation on the effective use of sub-jective well-being data to sufficiently measure pro-gress is that there is still only limited understand-ing of the time scale reflected in life evaluations.There is little yet known about the extent to whichone’s life expectancy plays into satisfaction, norhow much such reports reflect the quality of lifethat one may expect for oneself or for future gen-erations. Thus, one way or another, the far futuremay not be adequately represented in life satisfac-tion reports.

Modern attempts at formulating a more farsightedmeasure of progress than GDP typically incorpo-rate the health of natural resources and ecologicalsystems as indicators of long-term prospects forfuture well-being. However, when compared withmacroeconomic models of GDP, the theory relatingthe flow of current experienced well-being to the setof stocks which will sustain future well-being may beeven less firm.

The ties between current human well-being and thelong-term material stocks and services of natural sys-tems are too complex to know with confidence. Long-standing and unresolved debates in the macroeco-nomics of growth and in ecological economics are evi-dence that top-level indicators should not attempt tocombine or conflate current human well-being or cur-rent flows of benefits with indicators of natural sys-tems and their long-term sustainability. Instead, mea-sures of both are required, with the data on longer-term sustainability being used to guide decisions forsupporting future well-being.

More generally, while we are arguing for using life sat-isfaction as a way to summarize and integrate manyother measures of well-being, we do not favour single-minded focus on any one headline number, whether itbe GDP or life satisfaction. As we have already noted,both GDP and measures of subjective well-being,including life satisfaction, require diverse sources ofinformation. Thus we support the consensus reportedby Diener et al., “… that several measures of subjec-tive well-being need to be comparably collected tobetter understand the nature and consequences of in-ternational differences in subjective well-being” (2010,x-xi). Multiple and fine-grained measures of subjectivewell-being, as well as of the economic and social vari-ables that are its underlying supports, are needed(Helliwell and Barrington-Leigh 2010). For example,social connections with spouses, family, colleagues,communities and nations – measured by frequency ofcontact, depth of trust and feelings of belonging – areall powerful predictors of people’s big-picture reflec-tions about how good life feels. These attributes of asociety are likely to feature amongst the second-tiersupporting data, along with accounts of natural stocksof resources, stocks of physical capital, human capital,social capital and investments in social, economic andpolitical institutions. Only with this broader body ofinformation can the quality of the overall measures beassured and their supports better understood. Onlythus will it be possible to conduct the kind of broaderanalysis of costs and benefits required to inform morebalanced discussions and decisions in both the privateand public spheres.

Measuring life satisfaction to support better policiesand a healthier democracy

To conclude, we agree with Joseph Stiglitz and hiscolleagues that “what we measure affects what wedo; and if our measurements are flawed, decisions

may be distorted” and that “it has long been clearthat GDP is an inadequate metric to gauge well-be-ing over time particularly in its economic, environ-mental, and social dimensions” (Stiglitz, Sen andFitoussi 2009).

A growing consensus recognizes the need to replace,or at least complement, GDP with a broader set ofmeasures. Considerable energy is being spent to dojust this around the world with many organizationsproducing sets of progress measures. However, expe-rience over the past 30 years shows that these exer-cises, while they can be beneficial, are unlikely toprovoke widespread change. We believe that GDPwill remain the dominant way in which societies as-sess their progress unless an alternative single num-ber can be found to take GDP’s place in the spot-light. Sets of indicators are too complex to usurpGDP, while composite indicators of well-being aretoo controversial and generate more heat than light.Life satisfaction provides a way through this thicket.Such a measure would be statistically defensible,would not require arbitrary weighting and wouldarguably summarize – by sitting at the apex of – allof the different dimensions of life that comprise ourcurrent well-being.

Measuring life satisfaction offers a different lensthrough which to think about policy making: a lensthat in countries like the UK is already leading to arethink of many policy areas (Bacon, Brophy, Mguni,Mulgan and Shandro 2010). Moreover, the populari-ty of life satisfaction measures can trigger a richfacts-based national conversation about all thethings that matter in life.The measures resonate withthe public and so help the media fulfill their “respon-sibility in enabling citizens to get a sense of what ishappening in the society in which they are living.Information is a public good; the more we areinformed about what is happening in our society, thebetter will our democracies be able to function”(Stiglitz, Sen and Fitoussi 2009).

Although we believe that measures of subjectivewell-being have the potential to join or even sup-plant GDP’s place in the spotlight, we are not, forone moment, suggesting all policy making and pub-lic debate should focus narrowly and solely on in-creasing life satisfaction. Rather, we see a measureof life satisfaction as revitalizing and reframing de-bate, and ultimately provoking richer and broadernational conversations about all of the componentsof progress.

In short, the broad availability and use of life satis-faction as an overarching measure of well-being, ifproperly supported by appropriate measures of thesustainability of the social, institutional and environ-mental fabric, could encourage and support betterlocal and national policies to build and sustain betterlives for current and future generations.

References

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Cobb, C.,T. Halstead and J. Rowe (1995), The Genuine Progress In-dicator: Summary of Data and Methodology, Redefining Progress,San Francisco.

Danner, D. D., D. A. Snowden and W. D. Friesen (2001), “PositiveEmotions in Early Life and Longevity: Findings from the Nun Stu-dy”, Journal of Personality and Social Psychology 80, 804–13.

Diener, E., R. E. Lucas, U. Schimmack and J. F. Helliwell (2009),Well-Being for Public Policy, Oxford University Press, Oxford andNew York.

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OECD (2009), Charting Progress, Building Visions, ImprovingLife, Conference Brochure for the 3rd OECD World Forum onStatistics, Knowledge and Policy: October 27–30, Busan, SouthKorea, http://www.oecd.org/dataoecd/48/57/42934021.pdf (accessed24 September 2010).

Pressman, S. D. and S. Cohen (2007), “Use of Social Words in Auto-biographies and Longevity”, Psychosomatic Medicine 69, 262–69.

Stiglitz, J., A. Sen and J.-P. Fitoussi (2009), Report by the Com-mission on the Measurement of Economic Performance and SocialProgress, www.stiglitz-sen-fitoussi.fr

Thinley, J.Y. (2007), Interviewed in Istanbul as a part of the OECD’svideo Measuring and Fostering the Progress of Societies – A Glo-bal Initiative, http://www.youtube.com/watch?v=ugyU-EXB1dE&NR=1 (accessed September 24 2010).

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