Working Paper: NBER ID: w23111
Authors: Daniel J. Benjamin; Kristen Cooper; Ori Heffetz; Miles S. Kimball
Abstract: Many in both government and academia are showing renewed interest in developing new measures of national well-being. A new measure that goes “beyond GDP” to comprehensively capture non-market goods could be a useful supplement to traditional economic indicators for guiding policy and more accurately tracking welfare. But how should national well-being be conceptualized in theory? How could it be measured in practice? How could it be constructed in a systematic and politically neutral way? These questions should be approached by economists with the same level of care that has been taken in the theoretical and practical development of GDP. \nIn this short paper, we focus on one conceptual framework (Benjamin, Heffetz, Kimball, and Szembrot, 2014), which uses self-reported responses to subjective well-being (SWB) and stated preference (SP) survey questions to construct an index of well-being. We briefly review the framework and highlight challenges in the first two steps a government agency would need to take before conducting the SWB and SP surveys: (1) formulating a set of aspects of well-being that is theoretically valid and can be measured accurately via surveys; and (2) choosing and interpreting the surveys’ response scales.
Keywords: wellbeing index; subjective wellbeing; stated preference surveys
JEL Codes: C43; C83; D11; I31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| theoretical framework of wellbeing (I31) | validity of survey measures (C83) |
| definition of aspects (D84) | accuracy of measurement (C52) |
| response scales (C83) | perceived relationship between aspects of wellbeing and overall index (I31) |
| aspects of wellbeing (I31) | contributions to the PWB index (C43) |