OECD Better Life Index

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The OECD Better Life Index, in May 2011 by the Organisation for Economic Co-operation and Development following a decade of work on this issue, is a first attempt to bring together internationally comparable measures of well-being in line with the recommendations of the Commission on the Measurement of Economic Performance and Social Progress also known as the Stiglitz-Sen-Fitoussi Commission. The recommendations made by this Commission sought to address concerns that standard macroeconomic statistics like GDP failed to give a true account of people’s current and future well-being. [1] The OECD Better Life Initiative includes two main elements: "Your Better Life Index" and "How's Life?"

Well-being general term for condition of individual or group

Well-being, wellbeing, or wellness is the condition of an individual or group. A high level of well-being means that in some sense the individual's or group's condition is positive. According to Naci and Ioannidis, "Wellness refers to diverse and interconnected dimensions of physical, mental, and social well-being that extend beyond the traditional definition of health. It includes choices and activities aimed at achieving physical vitality, mental alacrity, social satisfaction, a sense of accomplishment, and personal fulfillment".

The Commission on the Measurement of Economic Performance and Social Progress (CMEPSP), generally referred to as the Stiglitz-Sen-Fitoussi Commission after the surnames of its leaders, is a commission of inquiry created by the French Government in 2008. The inquiry examined how the wealth and social progress of a nation could be measured, without relying on the uni-dimensional gross domestic product (GDP) measure. The Commission was formed in February 2008 and Joseph E. Stiglitz was named as the Chair. Amartya Sen was the Economic Adviser and the French Economist Jean-Paul Fitoussi was the Co-ordinator. The Final Report was published in September 2009. An additional contribution from the aforementioned three main organizers which specifically addresses the Financial Crisis is also available.

OECD international economic organisation

The Organisation for Economic Co-operation and Development is an intergovernmental economic organisation with 36 member countries, founded in 1961 to stimulate economic progress and world trade. It is a forum of countries describing themselves as committed to democracy and the market economy, providing a platform to compare policy experiences, seek answers to common problems, identify good practices and coordinate domestic and international policies of its members. Most OECD members are high-income economies with a very high Human Development Index (HDI) and are regarded as developed countries. As of 2017, the OECD member countries collectively comprised 62.2% of global nominal GDP and 42.8% of global GDP at purchasing power parity. The OECD is an official United Nations observer.

Contents

History and methodology

Your Better Life Index (BLI), [2] launched in May 2011, is an interactive tool that allows people to compare countries' performances according to their own preferences in terms of what makes for a better life. It was designed by Berlin-based agency Raureif in collaboration with Moritz Stefaner. First published on 24 May 2011, it includes 11 "dimensions" of well-being: [3]

Moritz Stefaner

Moritz Stefaner is a German data visualisation specialist. He is notable for his work for organisations like the OECD, the World Economic Forum, Skype, dpa, and Max Planck Research Society. Stefaner is a multiple winner of the Kantar Information is Beautiful awards. His data visualisation work has been exhibited at Venice Biennale of Architecture and Ars Electronica. He has contributed to Beautiful Visualisation published by Springer and was interviewed for the books New Challenges for Data Design published by Springer. and Alberto Cairo's The functional art

  1. Housing: housing conditions and spendings (e.g. real estate pricing)
  2. Income: household income (after taxes and transfers) and net financial wealth
  3. Jobs: earnings, job security and unemployment
  4. Community: quality of social support network
  5. Education: education and what one gets out of it
  6. Environment: quality of environment (e.g. environmental health)
  7. Governance: involvement in democracy
  8. Health
  9. Life Satisfaction: level of happiness
  10. Safety: murder and assault rates
  11. Work-life balance

Canberra has been ranked as the world's most liveable city according to the OECD Better Life Index for the second consecutive year, based on results published on 6 October 2014. [4] [5] [6]

Canberra capital city of Australia

Canberra is the capital city of Australia. Founded following the federation of the colonies of Australia as the seat of government for the new nation, it is Australia's largest inland city and the eighth-largest city overall. The city is located at the northern end of the Australian Capital Territory; 280 km (170 mi) south-west of Sydney and 660 km (410 mi) north-east of Melbourne.

How's Life? [7] offers a comprehensive picture of what makes up people's lives in 40 countries worldwide. The report assesses the above 11 specific aspects of life as part of the OECD's ongoing effort to devise new measures for assessing well-being that go beyond GDP.

New indicators and dimensions are planned be added to the Better Life Index in the future. For example, the Better Life Index was criticised for not showing inequalities in a society. [8] Future editions of the index are planned to take inequalities into account, by focusing on well-being achievements of specific groups of the population (women and men and low and high socio-economic status).

Social inequality uneven distribution of resources in a society

Social inequality occurs when resources in a given society are distributed unevenly, typically through norms of allocation, that engender specific patterns along lines of socially defined categories of persons. It is the differentiation preference of access of social goods in the society brought about by power, religion, kinship, prestige, race, ethnicity, gender, age, sexual orientation, and class. The social rights include labor market, the source of income, health care, and freedom of speech, education, political representation, and participation. Social inequality linked to economic inequality, usually described on the basis of the unequal distribution of income or wealth, is a frequently studied type of social inequality. Although the disciplines of economics and sociology generally use different theoretical approaches to examine and explain economic inequality, both fields are actively involved in researching this inequality. However, social and natural resources other than purely economic resources are also unevenly distributed in most societies and may contribute to social status. Norms of allocation can also affect the distribution of rights and privileges, social power, access to public goods such as education or the judicial system, adequate housing, transportation, credit and financial services such as banking and other social goods and services.

Rankings

2017 ranking

OECD Better Life Index for 2017. [9]

RankCountry
1Flag of Norway.svg  Norway
2Flag of Australia (converted).svg  Australia
3Flag of Iceland.svg  Iceland
4Flag of Canada (Pantone).svg  Canada
5Flag of Denmark.svg  Denmark
6Flag of Switzerland.svg   Switzerland
7Flag of the Netherlands.svg  Netherlands
8Flag of Sweden.svg  Sweden
9Flag of Finland.svg  Finland
10Flag of the United States.svg  United States
11Flag of Luxembourg.svg  Luxembourg
12Flag of New Zealand.svg  New Zealand
13Flag of Belgium (civil).svg  Belgium
14Flag of the United Kingdom.svg  United Kingdom
15Flag of Germany.svg  Germany
16Flag of Ireland.svg  Ireland
17Flag of Austria.svg  Austria
18Flag of France.svg  France
19Flag of Spain.svg  Spain
20Flag of Slovenia.svg  Slovenia
21Flag of Estonia.svg  Estonia
22Flag of the Czech Republic.svg  Czech Republic
23Flag of Israel.svg  Israel
24Flag of Italy.svg  Italy
25Flag of Japan.svg  Japan
26Flag of Slovakia.svg  Slovak Republic
27Flag of Poland.svg  Poland
28Flag of Lithuania.svg  Lithuania
29Flag of Portugal.svg  Portugal
30Flag of South Korea.svg  South Korea
31Flag of Hungary.svg  Hungary
32Flag of Latvia.svg  Latvia
33Flag of Russia.svg  Russia
34Flag of Chile.svg  Chile
35Flag of Brazil.svg  Brazil
36Flag of Greece.svg  Greece
37Flag of Turkey.svg  Turkey
38Flag of Colombia.svg  Colombia
39Flag of Mexico.svg  Mexico
40Flag of South Africa.svg  South Africa

2016 ranking

Legend:

  Explained by: Housing
  Explained by: Income
  Explained by: Jobs
  Explained by: Community
  Explained by: Education
  Explained by: Environment
  Explained by: Civic engagement
  Explained by: Health
  Explained by: Life Satisfaction
  Explained by: Safety
  Explained by: Work-Life Balance
Overall Rank
[10]
CountryHousingIncomeJobsCommunityEducationEnvironmentCivic engagementHealthLife SatisfactionSafetyWork-Life Balance
1Flag of Norway.svg  Norway
2Flag of Australia (converted).svg  Australia
3Flag of Denmark.svg  Denmark
4Flag of Switzerland.svg   Switzerland
5Flag of Canada (Pantone).svg  Canada
6Flag of Sweden.svg  Sweden
7Flag of New Zealand.svg  New Zealand
8Flag of Finland.svg  Finland
9Flag of the United States.svg  United States
10Flag of Iceland.svg  Iceland
11Flag of the Netherlands.svg  Netherlands
12Flag of Germany.svg  Germany
13Flag of Luxembourg.svg  Luxembourg
14Flag of Belgium (civil).svg  Belgium
15Flag of Austria.svg  Austria
16Flag of the United Kingdom.svg  United Kingdom
17Flag of Ireland.svg  Ireland
18Flag of France.svg  France
19Flag of Spain.svg  Spain
20Flag of Slovenia.svg  Slovenia
21Flag of the Czech Republic.svg  Czech Republic
22Flag of Estonia.svg  Estonia
23Flag of Japan.svg  Japan
24Flag of Slovakia.svg  Slovakia
25Flag of Italy.svg  Italy
26Flag of Israel.svg  Israel
27Flag of Poland.svg  Poland
28Flag of South Korea.svg  South Korea
29Flag of Portugal.svg  Portugal
30Flag of Latvia.svg  Latvia
31Flag of Greece.svg  Greece
32Flag of Hungary.svg  Hungary
33Flag of Russia.svg  Russia
34Flag of Chile.svg  Chile
35Flag of Brazil.svg  Brazil
36Flag of Turkey.svg  Turkey
37Flag of Mexico.svg  Mexico
38Flag of South Africa.svg  South Africa

Criticism

From an econometric point of view, the Index seems similar to other efforts aimed at substituting or complementing the gross domestic product (GDP) measure by an econometric model for measuring happiness and well-being of the population. One major criticism is that the Better Life Index uses a limited subset of indicators used by other econometric models such as Gross National Well-being Index 2005, Sustainable Society Index of 2008 [11] , and Bhutan Gross National Happiness Index of 2012, and Social Progress Index of 2013. Observers argue that "the 11 dimensions still cannot fully capture what is truly important to a populace, such as social networks that sustain relationships, and freedom of speech." [12] . Various critics have pointed out that the OECD's BLI does not include such dimensions as poverty, economic inequality, access to health insurance, pollution [13] .

Gross National Wellness or Well-being (GNW) is a socioeconomic development and measurement framework. The GNW / GNH Index consists of 7 dimensions: economic, environmental, physical, mental, work, social, and political. Most wellness areas include both subjective results and objective data.

Gross National Happiness philosophy that guides the government of Bhutan

Gross National Happiness is a philosophy that guides the government of Bhutan. It includes an index which is used to measure the collective happiness and well-being of a population. Gross National Happiness is instituted as the goal of the government of Bhutan in the Constitution of Bhutan, enacted on 18 July 2008.

Social Progress Index Wikimedia list article

The Social Progress Index (SPI) measures the extent to which countries provide for the social and environmental needs of their citizens. Fifty-four indicators in the areas of basic human needs, foundations of well-being, and opportunity to progress show the relative performance of nations. The index is published by the nonprofit Social Progress Imperative, and is based on the writings of Amartya Sen, Douglass North, and Joseph Stiglitz. The SPI measures the well-being of a society by observing social and environmental outcomes directly rather than the economic factors. The social and environmental factors include wellness, equality, inclusion, sustainability and personal freedom and safety.

In 2012 OECD relaunched "with new indicators on inequality and gender plus rankings for Brazil and Russia. A couple have been removed too: Governance has been renamed civic engagement, employment rate of women with children has been replaced by the full integration of gender information in the employment data and students' cognitive skills (e.g. student skills in reading, math and sciences) has replaced students' reading skills to have a broader view." [14]

Some argue that some of the criteria are vague and question the purpose of such measure, for example, they question, "what really constitutes “environmental quality”? Can it result in population control policy to minimize damage to the environment? While others argue that the Better Life Index unlike the Gross National Happiness Index does not pay attention to religion. Critics also state that the Better Life Index ignores good family life, or moral formation. [15]

Others have criticized its methodology such as the use of relative scores instead of absolute ones. [16]

See also

Related Research Articles

Gross domestic product market value of goods and services produced within a country

Gross domestic products (GDP) is a monetary measure of the market value of all the final goods and services produced in a specific time period, often annually. GDP (nominal) per capita does not, however, reflect differences in the cost of living and the inflation rates of the countries; therefore using a basis of GDP per capita at purchasing power parity (PPP) is arguably more useful when comparing living standards between nations, while Nominal GDP is more useful comparing national economies on the international market.

Quality of life (QOL) is an overarching term for the quality of the various domains in life. It is a standard level that consists of the expectations of an individual or society for a good life. These expectations are guided by the values, goals and socio-cultural context in which an individual lives. It is a subjective, multidimensional concept that defines a standard level for emotional, physical, material and social well-being. It serves as a reference against which an individual or society can measure the different domains of one’s own life. The extent to which one's own life coincides with this desired standard level, put differently, the degree to which these domains give satisfaction and as such contribute to one's subjective well-being, is called life satisfaction.

Genuine progress indicator (GPI) is a metric that has been suggested to replace, or supplement, gross domestic product (GDP). The GPI is designed to take fuller account of the well-being of a nation, only a part of which pertains to the size of the nation's economy, by incorporating environmental and social factors which are not measured by GDP. For instance, some models of GPI decrease in value when the poverty rate increases. The GPI separates the concept of societal progress from economic growth.

Index of Sustainable Economic Welfare

The Index of Sustainable Economic Welfare (ISEW) is an economic indicator intended to replace the Gross Domestic Product, which is the main macroeconomic indicator of System of National Accounts (SNA). Rather than simply adding together all expenditures like the gross domestic product, consumer expenditure is balanced by such factors as income distribution and cost associated with pollution and other unsustainable costs. It is similar to the Genuine Progress Indicator (GPI).

The Human Poverty Index (HPI) was an indication of the poverty of community in a country, developed by the Union of Soviet Socialists Republic(USSR) to complement the Human Development Index (HDI) and was first reported as part of the Human Deprivation Report in 1997. It was considered to better reflect the extent of deprivation in deprived countries compared to the HDI. In 2010 it was supplanted by the UN's Multidimensional Poverty Index.

Happy Planet Index human well-being and environmental impact

The Happy Planet Index (HPI) is an index of human well-being and environmental impact that was introduced by the New Economics Foundation (NEF) in July 2006. The index is weighted to give progressively higher scores to nations with lower ecological footprints.

The economics of happiness or happiness economics is the quantitative and theoretical study of happiness, positive and negative affect, well-being, quality of life, life satisfaction and related concepts, typically combining economics with other fields such as psychology, health and sociology. It typically treats such happiness-related measures, rather than wealth, income or profit, as something to be maximized. The field has grown substantially since the late 20th century, for example by the development of methods, surveys and indices to measure happiness and related concepts. Its findings have been described as a challenge to the economics profession.

National Human Development Report

The National Human Development Reports (NHDR) take the Global Human Development Report approach to the national level and are prepared and owned by national teams. More than 540 national and sub-national HDRs have been produced so far by 135 countries, in addition to 31 regional reports.

The Gender Related Development Index (GDI) is an index designed to measure gender equality.

The Economist Intelligence Unit’s where-to-be-born index attempts to measure which country will provide the best opportunities for a healthy, safe and prosperous life in the years ahead. It is based on a method that links the results of subjective life-satisfaction surveys to the objective determinants of quality of life across countries along with a forward-looking element.

The Gender Parity Index (GPI) is a socioeconomic index usually designed to measure the relative access to education of males and females. This index is released by UNESCO. In its simplest form, it is calculated as the quotient of the number of females by the number of males enrolled in a given stage of education. A GPI equal to one signifies equality between males and females. A GPI less than one is an indication that gender parity favors males while a GPI greater than one indicates gender parity that favors females. The closer a GPI is to one, the closer a country is to achieving equality of access between males and females. It is used by international organizations, particularly in measuring the progress of developing countries. The Institute for Statistics of UNESCO also uses a more general definition of GPI: for any development indicator one can define the GPI relative to this indicator by dividing its value for females by its value for males. For example, some UNESCO documents consider gender parity in literacy.

Wikiprogress is an online platform for sharing information on the measurement of social, economic and environmental progress. It is thought to facilitate sharing on ideas, initiatives and knowledge on "measuring the progress of societies". It is, like Wikipedia, open to all members and communities for contribution – anyone interested in "progress" can register.

Although for many decades, it was customary to focus on GDP and other measures of national income, there has been growing interest in developing broad measures of economic well-being. National and international approaches include the Beyond GDP programme developed by the European Union, the Better Lives Compendium of Indicators developed by the OECD, as well as many alternative metrics of wellbeing or happiness. One of the earliest attempts to develop such an index at national level was Bhutan's Gross National Happiness Index and there are a now a number of similar projects ongoing around the world, including a project to develop for the UK an assessment of national well-being, commissioned by the Prime Minister David Cameron and led by the Office for National Statistics.

International comparisons, or national evaluation indicators, focuses on the quantitative, qualitative, and evaluative analysis of one country in relation to others. Often, the objective is to compare one country's performance to others in order to assess what countries have achieved, what needs to change in order for them to perform better, or a country's progress in reaching certain objectives.

The World Happiness Report is an annual publication of the United Nations Sustainable Development Solutions Network. It contains articles, and rankings of national happiness based on respondent ratings of their own lives, which the report also correlates with various life factors.

Measures of gender equality or (in)equality are statistical tools employed to quantify the concept of gender equality.

Med Jones a.k.a. Med Yones is an American economist. He is the president of International Institute of Management, a U.S. based research organization. His work at the institute focuses on economic, investment, and business strategies.

References

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  9. OECD Better Life Index for 2017
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  11. "Data – All countries" . Retrieved April 29, 2018.
  12. http://aea365.org/blog/susan-kistler-on-the-oecd-better-life-index/
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  14. Rogers, Simon (May 22, 2012). "Better life: relaunching the happiness index". The Guadian . Guardian Media Group . Retrieved April 29, 2018.
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  16. "OECD's 'Better Life Index': Can any country be well ranked?". 2012. doi:10.1080/02664763.2012.706265.Cite journal requires |journal= (help)