The Wellbeing of Nations: Meaning, Motive and Measurement

6 How to measure national wellbeing?

a man who knows the price of everything and the value of nothing.

Oscar Wilde (Lady Windermere's Fan, 1891)

In this chapter, we will explore various measurement approaches that have been proposed and are being pursued around the world. We will also take stock of a number of important issues in the measurement of national wellbeing that have arisen during these developments.

Analysing the available data for some 30 countries of the Organisation for Economic Co-operation and Development, the OECD, Boarini et al. (2006, p. 6) concluded that measures of economic growth are necessary but not sufficient for ‘any assessment of well-being’. Their findings suggest a typology for prospective measures of national wellbeing:

• GDP and other measures of economic resources, both for the economy as a whole and for households (but data availability and reliability restrict the scope for cross-country and intertemporal comparisons);
• Calculations to extend national accounts, for example, to include leisure time, the sharing of income within households and distributions across households;
• Indicators to measure specific social conditions (which we take to include environmental conditions as well) that are related to wellbeing;
• Survey-based data on happiness and life satisfaction.

Fleurbaey (2009, p. 1030) does not refer to Boarini et al.'s paper but discusses four approaches to measuring ‘social welfare’ beyond Gross Domestic Product (GDP) that are very similar ...