Measuring Well-being:What Role for Social

Indicators?

Dr. Jongwook WonKorea Institute for Health and

Social Affairs

How to measure well-being

• Quantitative macro-economic measures

per capita GNP GDP GNI Final Consumption Expenditure

• Qualitative aspects of the well-being Green GNP, Welfare GNP, and Sustainable Economic Welfare

Where do the Indicators(Index) Stand?

Limitation of quantitative macro-

economic measures • Size of economy in terms of

Production activities Pollution, Depletion of

Natural resource, Crime, Congestion, • Size of consumption does not reflect

actual distribution of income/consumption, still does

not account negative externalities

Limitation of qualitative aspects of the well-being

Green GNP, SEW Cross-country comparison is impossible

Use too many assumptions Each country use different

assumptions Assumptions are too subjective ( aesthetic value of wet-land,

discomfort of noise into monetary value)

Cross-country correlations between per

capita GDP and social indicators

Increase in GDP per capita and Improvement of Basic Social

Indicators

(1990-2005)

Level of Life Satisfaction with GDP per capita Across Asian Countries

Level of Life Satisfaction with GDP per capita Across Asian

Countries

Advantages of Social Indicators

• Cross Country Comparison is possible• It derives policy implications• It is relatively easy and inexpensive

to produce

Limitation of Social Indicators

• It is too simple to account for the whole dimension of the society

• It covers only published data• Need to modify to fit in less developed countries More empahsis on poverty reduction We added a special chapter