Making Well-being Indicators Count

29th November 2007Bangkok, Thailand

Nic Marksfounder of the centre for well-beingnew economics foundation

Who are nef?• An independent UK think-tank (founded 1986)

• Inspired by 3 principles1. Ecological Sustainability2. Social Justice3. People’s Well-being

• Well-being programme set up in 2001 to address question: What would policy look like if people’s well-being was its aim?

• Centre for well-being created in 2006• Happy Planet Index 2006 (1m downloads)

Making W-B indicators count

What do indicators actually indicate?Measuring personal well-beingEcological efficiency and well-being – The Happy Planet IndexCreating Local Well-being indicators Influencing Policy Formation

What do Indicators Indicate?

Ecosystem

What do Indicators Indicate?

Human system

Ecosystem

What do Indicators Indicate?

Human system

Ecosystem

What do Indicators Indicate?

Human system

Ecosystem

Culture

Social Capital

Governance

Economy

Education Healthcare

Natural Capital

Biodiversity

CO2 emissions

Soil erosion

Water quality

Air quality

What do Indicators Indicate?

Human system

Ecosystem

Culture

Social Capital

Governance

Economy

Education Healthcare

Natural Capital

Biodiversity

CO2 emissions

Soil erosion

Water quality

Air quality

Resource

demand

What do Indicators Indicate?

Human system

Ecosystem

Resource

demand

Ecosystem well-being

Human well-being

Culture

Social Capital

Governance

Economy

Education Healthcare

Natural Capital

Biodiversity

CO2 emissions

Soil erosion

Water quality

Air quality

Ultimate Outcome measures

Human system

Ecosystem well-being

Human well-being

Natural Capital

Biodiversity

CO2 emissions

Soil erosion

Water quality

Air quality

What do we mean by “well-being”?

Subjective well-being = People’s experience of their quality of life

“Feeling good AND doing well” (a 1960s definition of self-esteem)

Often measured by “life satisfaction”

GDP and Life SatisfactionA Challenge to the Political Status Quo

UK - GDP and Life Satisfaction 1973 - 2002

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%

1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001

GDP

Life Satisfaction

GDP and Life SatisfactionA Challenge to the Political Status Quo

Thailand's economic miracle

010002000300040005000600070008000

1965

1968

1971

1974

1977

1980

1983

1986

1989

1992

1995

1998

2001

Year

GDP

per

cap

ita P

PP ($

)

012345678910

Happ

ines

s (0

-10)

GDP and Life Satisfaction

Life satisfaction and GDP in Japan

60

80

100

120

140

160

180

200

220

240

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

% c

hang

e

GDP per capita ($)Life satisfaction

GDP and Life Satisfaction

Life satisfaction and GDP in China

60

100

140

180

220

260

300

340

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

% c

hang

e

GDP per capitaLife satisfaction

Diminishing marginal returnsof well-being to income

Life satisfaction and Household income in the UK

5.00

5.50

6.00

6.50

7.00

7.50

8.00

£0 £20,000

£40,000

£60,000

£80,000

£100,000

£120,000

£140,000

Household total net income

Life

Sat

isfa

ctio

n (0

-10)

Diminishing marginal returnsof well-being to income

Life satisfaction and Household income in the UK

5.00

5.50

6.00

6.50

7.00

7.50

8.00

£0 £20,000

£40,000

£60,000

£80,000

£100,000

£120,000

£140,000

Household total net income

Life

Sat

isfa

ctio

n (0

-10)

Diminishing marginal returnsof well-being to income

China

0123456789

10

0 10000 20000 30000 40000

Gross Household Income ($ 2000 PPP)

Life

Sat

isfa

ctio

n (0

-10)

-1.25

-1.00

-0.75

-0.50

-0.25

0.00

0.25

-5 -4 -3 -2 -1 0 1 2 3 4 5 6 7

Years

Cen

tere

d Li

fe S

atis

fact

ion

Year of Widowhood

Micro data: Widowhood and Well-being

-1.25

-1.00

-0.75

-0.50

-0.25

0.00

0.25

-9 -8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6

Years

Cen

tere

d Li

fe S

atis

fact

ion

Micro data: Divorce and Well-being

Year of Divorce

Micro data: Marriages and Well-being

Marriage Paths of Life Satisfaction

-1

-0.5

0

0.5

1

1.5

1 2 3 4 5 6 7 8 9 10

Years of Marriage

Adj

uste

d Li

fe S

atis

fact

ion

Mean Positive GroupNegative Group

Where does our happiness comes from?

Our Parents - 50%Our Circumstances - 10%Our Activities and Outlook - 40%

Making W-B indicators count

What do indicators actually indicate?Measuring personal well-beingEcological efficiency and well-being – The Happy Planet IndexCreating Local Well-being indicators Influencing Policy Formation

Ecological Efficiency & W-B

UN Human Development Report on Climate Change, Nov 2007:

“The world has less than a decade to change course to avoid irreversible ecological catastrophe… Developed countries should cut emissions by at least 30% by 2020 and by 80% by 2050. Developing nations should cut emissions by 20% by the year 2050.”

A Happy Planet Index

A Happy Planet Index

A Happy Planet Index

Launched by nef in July 2006HDI style rank order of nationsMeasure of the “Ecological efficiency with which human well-being is delivered”Over 1,000,000 downloads to date

What HPI measures

Human system

Ecosystem

Resource

demand

Ecosystem well-being

Human well-being

Culture

Social Capital

Governance

Economy

Education Healthcare

Natural Capital

Biodiversity

CO2 emissions

Soil erosion

Water quality

Air quality

What HPI measures

Human system

Resource

demand

Human well-being

What HPI measures

Human system

Resource

demand

Human well-being

What HPI measures

Human system

Resource

demand

Human well-being Happy and Long Lives

Resource Use

What HPI measures

Human system

Resource

demand

Human well-being Happy and Long Lives

Resource Use

(divided by)

What HPI measures

Human system

Resource

demand

Human well-being (Life Sat) * (Life Exp)

Eco Footprint

(divided by)

Country comparisons

Country Life Sat

Life Exp

Eco Foot HPI

Costa Rica

Bhutan

Thailand

UK

USA

Country comparisons

Country Life Sat

Life Exp

Eco Foot HPI

Costa Rica 7.5

Bhutan 7.6

Thailand 6.5

UK 7.1

USA 7.4

Country comparisons

Country Life Sat

Life Exp

Eco Foot HPI

Costa Rica 7.5 78.2

Bhutan 7.6 62.9

Thailand 6.5 70.0

UK 7.1 78.4

USA 7.4 77.4

Country comparisons

Country Life Sat

Life Exp

Eco Foot HPI

Costa Rica 7.5 78.2 2.1

Bhutan 7.6 62.9 1.3

Thailand 6.5 70.0 1.6

UK 7.1 78.4 5.4

USA 7.4 77.4 9.5

Country comparisons

Country Life Sat

Life Exp

Eco Foot HPI

Costa Rica 7.5 78.2 2.1 66.0 (3rd)

Bhutan 7.6 62.9 1.3 61.1 (13th)

Thailand 6.5 70.0 1.6 55.4 (32nd)

UK 7.1 78.4 5.4 40.3 (108th)

USA 7.4 77.4 9.5 28.8 (150th)

Ecological Efficiency & W-B

Happy Planet Index is a measure of:

The environmental (carbon) efficiency of effectively delivering human well-being

So we need to be both “effective” – enhancing personal and social well-being and cultivating happiness“efficient” – using less resources

Well-being and Policy

nef’s well-being manifesto:– launched Sept 2004– covered eight areas of policy– strategy was ‘to start a debate’– designed to be ‘contagious’– a lot of mini manifestos out there..

Downloadable from: www.neweconomics.org

A well-being manifesto1. Measure what matters2. Create a well-being economy3. Reclaim our time4. Flourishing schools5. Complete health for the nation6. Invest in the very early years7. Authentic advertising (and discourage

materialism)8. Community contribution

Investing in well-beingOverall population interventions

Safety nets and support systems to alleviate genuine poverty Community-based investment to facilitate self-organization of local place-based well-beingCreating Quality employment opportunities: good jobs and good employers

Investing in, working with the specific groupsCultivation of Happiness - co-productionThe HOW of policy delivery – health, education…Seeding self-organizing systems that support and challenge people

Contact Details: Nic Marksnic.marks@neweconomics.org

Other reports downloadable from

www.neweconomics.org1. Chasing Progress – MDP2. Power & Potential of W-B indicators3. Well-being Manifesto4. Well-being and Environment5. Spoiled Ballot – democracy and well-being6. Happy Planet Index