Reference no: EM133174021
Obstacles to Measuring Aggregate "Well-Being"
Alongside Gross Domestic Product
Policymakers and commentators often succumb to the temptation to try using GDP as a measure of aggregate welfare (overall well-being), in spite of its various weaknesses as just an indicator of a country's overall economic performance.
Some economists have responded by seeking to develop quantitative index measures of welfare to use alongside GDP. Most proposed measures of a collective well-being have typically relied on people's answers to survey questions that ask respondents to rate their perceived levels of satisfaction or happiness along numerical scales, such as "1 = very happy" versus "5 = very unhappy." Such survey methods of eliciting measures of happiness suffer, however, from some long-recognized problems. One difficulty is that research has demonstrated that answers to such questions can be influenced simply by the order in which questions appear in the surveys. Answers can also be influenced by slight differences in the wording of questions.
More generally, index measures of well-being derived from subjective answers to survey questions are based on what people say rather than on data that arguably might objectively indicate true states of satisfaction or happiness.
Some behavioural economists propose using recent research in 'neuroeconomics', in which economists use measures of blood pressure, body mass indexes, and heart rates to evaluate people's responses to changes in prices, incomes, and so on. The idea would be to conduct random surveys documenting how close such biometric measures are to healthful levels to objectively calculate a nation's aggregate welfare.
Source: Miller Economics
For Critical Thinking
- Describe how the Happy Planet Index might provide a better measure of the overall well-being of a country.