Two approaches to alternative measures of progress:

Two approaches to alternative measures of progress: the Happy Planet Index and National Accounts of Well-being

ESRC Research Methods Festival8 July 2010

Juliet MichaelsonCentre for Well-beingnef (the new economics foundation)

About nef

• An independent UK think-and-do-tank (founded 1986).

• Inspired by 3 principles– Sustainable development– Social justice– People’s well-being

• Well-being programme set up in 2001 to ask: What would policy look like if it focused on improving

well-being?

How not to measure progress

Gross National Product counts air pollution, and cigarrette advertising and…the destruction of the redwood and the loss of our natural wonder in chaotic sprawl. It does not allow for the health of our children, the quality of their education or the joy or their play…the beauty of our poetry or the strength of our marriages. It measures everything, in short, except that which makes life worthwhile.

Robert Kennedy, 1968

GDP and GWB

“GDP. Gross domestic product. Yes it's vital. It measures the wealth of our society. But it hardly tells the whole story.

Wealth is about so much more than pounds, or euros or dollars can ever measure. It's time we admitted that there's more to life than money, and it's time we focused not just on GDP, but on GWB - general well-being.”

David Cameron MP May 2006

So why do we do it?

Simon Kuznets in the US wanted to ‘improve the welfare of the poorest’ during the Great Depression in the 1930s

“The welfare of a nation can scarcely be inferred from a measurement of national income”

So why do we do it?

Contextual importance: During WW2 the militarisation process created an almost exclusive emphasis on production.

Institutionalisation: UN System on National Accounting (1953). Currently 1993 standard being used most widely.

‘Stiglitz’ Commission recommendations

• Improve economic measures:

– focus on income, household, wealth and assets, distribution, non-market activities

• Measure dimensions of quality-of-life, including subjective well-being

• Measure sustainability through a dashboard of measures

A view of society

Human society

Life Sat x Life Exp = Happy Life Years

Ecological Footprintland required to produce resources and sequester CO2

produced by a nation, based on consumption patterns

The HPI

• Combined into an efficiency index:

Results by country

HPI rank Countries Region Life Sat Life Exp EF   HPI

1 Costa Rica 1a 8.5 78.5 2.3 = 76.1

2 Dominican Rep 1a 7.6 71.5 1.5 = 71.8

3 Jamaica 1a 6.7 72.2 1.1 = 70.1

9 Brazil 1b 7.6 71.7 2.4 = 61.0

20 China 6a 6.7 72.5 2.1 = 57.1

35 India 5a 5.5 63.7 0.9 = 53.0

43 Netherlands 2c 7.7 79.2 4.4 = 50.6

74 UK 2c 7.4 79.0 5.3 = 43.3

114 USA 2b 7.9 77.9 9.4 = 30.7

143 Zimbabwe 4a 2.8 40.9 1.1 = 16.6

Global results

A sense of direction

What HPI doesn’t do

• Provide texture

• Links to specific policy

• Sensitivity

• Other aspects of human society

Where National Accounts of Well-being can help…

Functioning welland satisfaction

of needs

e.g. to be connected to others,

autonomous, and competent

Psychologicalresources

e.g. resilience, optimism, self-esteem

Enablingconditions

e.g. opportunities and obstacles, inequalities, social norms, culture

Experience of life e.g. happiness,

satisfaction, interest, boredom and distress

A dynamic model of well-being

National Accounts structure

Personal well-being

www.nationalaccountsofwellbeing.org

Social well-being

www.nationalaccountsofwellbeing.org

Overall well-being: adjustable ratio

www.nationalaccountsofwellbeing.org

Country well-being profiles

www.nationalaccountsofwellbeing.org

Enhancing policy making

Means and ends – policy outcomes and drivers– e.g. autonomy better education

outcomes?

self-esteem better health outcomes?

Looking back and looking forward– Track change, evaluate, compare– Identify need, assess proposals, shape content,

delivery and targeting

Sensitivity to policy?– Multiple measures means more scope for change– Current scores suggest room for improvement

Levels of analysis

HPI

NAWB

Find out more

• www.happyplanetindex.org

• www.nationalaccountsofwellbeing.org

juliet.michaelson@neweconomics.org