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The term well-being is most commonly used to describe what is ultimately good for a person. The question of what well-being consists of is of great importance for various disciplines, such as economics, philosophy and psychology. Well being is associated with two core notions - quality of life and happiness. Related are the concepts of freedom, human rights and social progress.
When evaluating the general well-being of individuals and societies, we usually refer to quality of life. It is used in a wide range of contexts, including the fields of international development, healthcare, and political science. Quality of life should not be confused with the concept of standard of living, which is based primarily on income. Instead, quality of life indicators include wealth and employment, and others pertaining to the built environment, physical and mental health, education, recreation and leisure time, and social belonging. While quality of life has long been an explicit or implicit policy goal, adequate definition and measurement have been elusive. Diverse "objective" and "subjective" indicators across a range of disciplines and scales, and recent work on subjective well-being surveys and the psychology of happiness have spurred renewed interest. Regarding happiness, since it is subjective and hard to measure, other measures are generally given priority. It has also been shown that happiness, as much as it can be measured, does not necessarily increase correspondingly with the comfort that results from increasing income. As a result, standard of living should not be taken to be a measure of happiness. In the 19th century, economists believed that happiness, which they called utility, could in principle be measured. By the 1950s, this view had been almost abandoned by neoclassical economists. However, in past decades, psychologists and a few economists have been studying peoples‘ feelings and investigating what makes them happy. The emerging insights are very important in relation to the study of the satisfaction of human needs and desires, but are still largely ignored in neoclassical economics. Several countries and International organizations are now questioning the divergence between economic growth and well-being improvements. Empirical studies have pointed out that income growth does not imply an increase in the quality of life and well-being enhancements. Economies are growing while social and income inequalities keep rising along with new poverties and social exclusions. As a result, social capital and cohesion are weakened with effects on crime, violence and life satisfaction.
Rethinking Growth and Well-being
These socio-economic phenomena call for a critical review of the nexus between economic growth and well-being. Does the GDP index tell us something about well-being measures? GDP does not include some positive components of well-being (social capital, social and cultural consumptions, etc.) but does account for components which have negative impacts on well-being (pollution, inequalities, etc.). As a consequence, economic indicators are poor measures of well-being. The need for a better evaluation of individual and collective well-being has shifted attention from GDP measures towards alternative measures both at macro (ex: Human Development Index, Index of Sustainable Economic Welfare, Genuine Progress Indicator) and micro levels – subjective measures of well-being.
Examples of new indicators of well-being: - National Accounts of Well-being (New Economics Foundation) use comprehensive data from a survey of 22 European nations examining both personal and social well-being. Personal well-being describes people‘s experiences of their positive and negative emotions, satisfaction, vitality, resilience, self-esteem and sense of purpose and meaning. Social well-being is made up of two main components: supportive relationships, and feelings of trust and belonging. - Human Well-being Index (Prescott-Allen, IUCN) is an attempt to overcome some of the limitations of GDP and the Human Development Index as measures of national wellbeing. Its main purpose is to form a component in a wellbeing indicator that addresses issues of sustainability and the "well-being" of the ecosystem. HWI is a composite of five domains: health and population; wealth; knowledge and culture; community; equity. - The Happy Planet Index (New Economics Foundation) is designed to challenge well-established indices of national development, such as GDP and the HDI, which are seen as not taking sustainability into account. Each country‘s HPI value is a function of its average subjective life satisfaction, life expectancy at birth, and ecological footprint per capita.
Examples of programs integrating wellbeing: - The Stiglitz report of 2009, which calls for measure of well-being alongside growth. This report adds to the literature on indicators of economic well-being and social progress and substantiates the voices of early pioneers like Hazel Henderson and Herman Daly. According to Stiglitz, ―GDP has increasingly become used as a measure of societal well-being and changes in the structure of the economy and our society have made it an increasingly poor one; many things that are important to individuals are not included in GDP." The academics recommend including other factors, such as sustainability and education. - Beyond GDP initiative (European Commission, European Parliament, Club of Rome, OECD and WWF), which work on improving measures of progress, wealth and well-being. In August 2009, the European Commission released its Communication ―GDP and beyond: Measuring progress in a changing world‖. The Communication outlines an EU roadmap with five key actions to improve our indicators of progress in ways that meet citizens‘ concerns and make the most of new technical and political developments.
- Costanza, R. et. al. (2008) ―An Integrative Approach to Quality of Life Measurement, Research and Policy‖. S.A.P.I.EN.S. 1 (1)
- Layard R. (2005) Happiness: Lessons from a New Science. London. Penguin. April 2006. ISBN 978-0141016900.