Two approaches to alternative measures of progress: the Happy Planet Index and National Accounts of Well-being ESRC Research Methods Festival 8 July 2010 Juliet Michaelson Centre for Well-being nef (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 Footprint land required to produce resources and sequester CO 2 produced by a nation, based on consumption patterns

The HPI Combined into an efficiency index:

Results by country HPI rankCountriesRegionLife SatLife ExpEF HPI 1Costa Rica1a =76.1 2Dominican Rep1a =71.8 3Jamaica1a =70.1 9Brazil1b = China6a = India5a = Netherlands2c = UK2c = USA2b = Zimbabwe4a =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 well and satisfaction of needs e.g. to be connected to others, autonomous, and competent Psychological resources e.g. resilience, optimism, self-esteem Enabling conditions 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

Social well-being

Overall well-being: adjustable ratio

Country well-being profiles

Enhancing policy making  Means and ends – policy outcomes and drivers –e.g. autonomybetter education outcomes? self-esteembetter 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

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