Definition
Economic well-being
The level of prosperity, economic satisfaction, and standard of living experienced by members of an economy.
- Standard national income statistics (GDP/GNI) do not provide meaningful measures of the economic well-being of the residents of an economy.
- There are other specific alternative measures of well-being:
- OECD Better Life Index.
- Happiness Index.
- Happy Planet Index.
- These indices consider a broader range of dimensions beyond economic activity, providing a more comprehensive view of well-being.
OECD Better Life Index
Definition
OECD Better Life Index
An alternative to traditional national income statistics that evaluates economic well-being across multiple dimensions, incorporating aspects that account for the quality of life.
- The OECD Better Life Index was developed by the Organisation for Economic Co-operation and Development (OECD) to measure well-being.
- The index evaluates well-being using 11 dimensions, divided into two categories:
- Material conditions:
- Income.
- Jobs.
- Housing.
- Quality of life:
- Health.
- Education.
- Work-life balance.
- Social connections.
- Civic engagement.
- Environmental quality.
- Personal security.
- Subjective well-being.
- Material conditions:
Indices, such as the OECD Better Life Index, measures values in a range between two values. These values are usually 0 to 1, but in the case of the OECD BLI, it is from 0 to 10.
ExampleThe OECD provides the index values for each of the 11 dimensions it evaluates. So for example, for housing, here are some real-world values (more is better):
- Spain: 6.7
- Poland: 5.1
- Norway: 8.1
The OECD Better Life Index is a meaningful measure since it:
- Goes beyond economic performance to include social and environmental factors that contribute to well-being.
- Provides policymakers and the public with a more nuanced understanding of societal progress.
- Encourages the formulation of policies aimed at improving overall quality of life.
