Complement other outcome measures

Measures of subjective well-being provide an alternative yardstick of progress that is firmly grounded in people’s experiences. These subjective measures may differ in important respects from the picture provided by more conventional metrics that focus on access to resources. This is desirable, since if measures of subjective well-being duplicated the picture provided by other social and economic indicators, there would be few additional gains in using them.5 In particular, being grounded in peoples’ experiences and judgements on multiple aspects of their life, measures of subjective well-being are uniquely placed to provide information on the net impact of changes in social and economic conditions on the perceived well-being of respondents, taking into account the

Box 1.1. Subjective well-being, GDP growth and the “Arab Spring"

For policy-makers, measures of subjective well-being are valuable as an indicator of progress when they can alert them to issues that other social and economic indicators might fail to identify. One recent example where measures of subjective well-being clearly demonstrate their ability to capture important elements of well-being not captured by more traditional measures is the decline in country-average measures of subjective well-being that occurred in Egypt and Tunisia in the years leading up to 2011, a decline that contrasts with the much more favourable evolution of GDP data. For example, Tunisian real GDP per capita increased from USD 8 891 in 2008 to USD 9 489 in 2010, i.e. a real gain of around 7%. However, the proportion of the population indicating a high level of satisfaction with their life as a whole fell from 24% to 14% over the same period (Gallup, 2011). Egypt (shown in the picture below) shows a similar pattern from 2005 to 2010, with a real gain in GDP per capita of around 34% and a decline in the share of respondents classified as “thriving” by almost half.* This illustrates how subjective perceptions can provide information on very significant outcomes in societies that other conventional indicators such as GDP growth do not provide.

* “Thriving” is a composite measure of subjective well-being calculated by the Gallup Organisation. It is based on answers to the Cantril ladder measure of life satisfaction for life at the moment and how people expect life to be in five years.

Figure 1.2. Trends in subjective well-being and GDP in Egypt: 2005-10

Recent trends in percentage “thriving” and GDP per capita (PPP)

Source: Subjective well-being data are from Gallup. GDP per capita (PPP) estimates are from the International Monetary Fund's World Economic Outlook Database.

impact of differences in tastes and preferences among individuals. An example of how these measures can change perceptions about progress in individual countries is provided by Box 1.1, in respect of the “Arab Spring”.

In addition to providing information on aggregate changes at the national level, measures of subjective well-being can also provide a picture of which groups in society are most (dis)satisfied or experience the best or worse life. Again, because measures of subjective well-being capture the impact of taste and aspirations as well as the distribution of other life circumstances, such measures provide useful additional information for policy-makers in situations where comparisons are made across sub-groups of the population. Migrants, for example, may be more motivated than the rest of the population by income relative to other factors (Bartram, 2010), as this is a primary motive for their decision to move abroad. An attempt to assess migrant well-being compared to the rest of the population is therefore challenging, given that there is good reason to believe that there will be systematic differences in the importance that the two groups attach to different aspects of quality of life. Because measures of subjective well-being incorporate the impact of the different weights that various people may attach to the different aspects of their quality of life, they have the potential to add an important dimension to analysis in situations involving comparisons between population groups.

The final policy use of measures of subjective well-being in the context of measuring progress is for cross-country comparisons of aggregate measures of subjective well-being, such as those included in How’s Life? (OECD, 2011). Due to the impossibility of performing controlled experiments across countries, cross-country comparisons of subjective well-being outcomes are one way to learn about the strengths and weaknesses of different policies. Because measures of subjective well-being are sensitive to a different range of drivers than are other social and economic indicators, they can provide additional information about the consequences of a particular policy. A crucial issue in using measures of subjective well-being in this way, however, is the degree to which cross-cultural comparisons of measures of subjective well-being are valid. This issue is considered in more depth later in this chapter.

The interest of the general public and the media in using measures of subjective well-being as complements of measures of progress is generally similar to that of policymakers. For these users, the key contributions that subjective well-being measures can potentially make are in highlighting how different groups fare compared to each other, what can be learned from the experiences of other countries, and perhaps whether things are getting better or worse overall - all of which are of potential interest to the general public and the media.

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