The Report Going for Growth by Oecd, released on Tuesday 7th, includes a Chapter on “alternative measures of well being”. I am sorry that only a short summary of the report is freely available on line, with few references to this chapter, but I will try summarize its most important contents.
First of all, I think that it’s important that Oecd, the industrialized countries’ organization, with high capacity in economic and statistical research, poses the question on how to measure a country’s performance, in alternative to the Gdp (gross domestic product) per capita. In my blog I have already discussed this line of research among the economists, that I find very interesting, although it should not be interpreted as a political rejection of the concept of wealth and profit.
The Chapter assesses if Gdp per capita can serve as a reasonable proxy of overall well-being. Other national accounts measures are arguably better suited for this purpose but they are not as readily available and are in any case closely correlated with Gdp in most countries belonging to Oecd.
Illustrative calculations to “extend” Gdp to include leisure time, the sharing of income within households and distributional concerns suggest that cross-country ranking based on these indicators and Gdp per capita are generally similar. Across differenty countries, levels of most measures of specific social conditions are positively related to Gdp per capita while changes over time are not. However, survey-based data on happiness and life satisfaction across different countries are only weakly related to levels of Gdp per capita. Overall, Gdp per capita remains critical for any assessment of well-being but needs to be complemented with other measures to get a comprehensive picture of well-being.
From the content we can draw two conclusions:
1) To use other measures instead of Gdp can be useful, but it complicates international comparisons because the other data are not easily available.
2) Other indicators that are based on surveys about happiness and life satisfaction show weak relation with the economic indicators. To this purpose, the chapter includes an interesting graph, that shows for instance that Mexicans are very happy in spite of their low standard of living, while Italians are unhappy, in spite of the good “Italian way of life”. One might think that these differences are influenced by cultural values (the meaning of “happiness” and “life satisfaction” may change in different countries) rendering comparisons very difficult.
I think that no final conclusions can be drawn from the study by Oecd. But it must be considered a useful contribution to the research of new statistical indicators for the 21st century.