National Accounts of Well-being

24th November 2008

4th International Conference on GNH
Thimpu Bhutan
Thimpu,

Nic Marks
Founder of centre for well-being
nef (the new economics foundation)
Who are nef?
The New Economics Foundation
• Founded 1986 when G7 summit in UK
• An
A independent
i d d t think
thi k (& do)
d ) tank
t k
• Inspired by 3 principles
1. Ecological Sustainability
2. Social Justice
3. People’s Well-being
• centre ffor well-being
g formed 2005
National Accounts of Well-being
¾ The Context of National Accounts
¾ International & UK Policy/Political Context
¾ nef
nef’ss National Accounts of Well
Well-being
being
¾ Personal & Social Well-being
¾ Challenges in Creating Indexes
¾ Draft Structure and results of Accounts

¾ How might NAWB be used?

History of National Accounts
The Great Depression. Simon Kuznets,
‘improving welfare’, Ernst Wagemann,
‘decreasing unemployment’
2nd World War - the militarisation process
p
created an almost exclusive emphasis
on production. (Keynes)
Institutionalisation – UN System on
National Accounting (1953). Currently
1993 standard being used most widely
widely.
Policy/Political Context
France:
President Nicholas Sarkozy’s Commission on
“Quality of Life” – Amartya Sen, Joseph Stiglitz and
Jean-Paul
Jean Paul Fitoussi
North America:
Daniel Kahneman, Ed Diener and John Helliwell:
“National Differences in Well-being”
OECD:
“Measuring
Measuring the Progress of Societies”
Societies Programme
European Council:
“Beyond
Beyond GDP”
GDP conference – November 2007
UK Policy Timeline
2000: Local Government Act - Power of Well-being
2002: Prime Minister’s Strategy Unit
2004: Layard's Happiness book & nef’s manifesto
2005 Sustainable
2005: S t i bl D Development
l t St
Strategy
t
2006: nef’s Happy Planet Index
2007 Office
2007: Offi for
f National
N ti l Statistics
St ti ti ‘Societal
‘S i t l Well-
W ll
being’ paper
2008: Audit Commission: Place-based
Place based Well-being
Well being
Dept of Science Foresight Progamme on
Mental Capital
p & Well-being g
National Accounts of Well-being
2009 – to be launched mid January
¾ nef’s National Accounts of Well-being
¾ Personal & Social Well-being
¾ Challenges
g in Creating
g Indexes
¾ Draft Structure and results of Accounts
European Social Survey
• ESS is a cross
cross-national
national time-series
time series
survey, conducted every 2 years

• Round 3 2006/2007 – 23 countries

Winner of the 2005 Descartes Prize

Europe’s top award for science
Well-being Module

50 questions on Personal and Social Well-being

Well being

Questionnaire Design Team:

Felicia Huppert, Cambridge University, UK
Andrew Clark, Delta, Paris, France
Nic Marks, nef, London, UK
Johannes Siegrist, Dusseldorf Uni, Germany
Alois Stutzer,, Zurich University,
y, Switzerland
Joar Vittersø, Tromsø University, Norway
Draft Structure of Accounts

National Well-being

Personal Well
Well-being
being Social Well-being
Well being
Draft Structure of Accounts

Personal
well-
being

Emotional Good Satisfying

Vitality Resilience
well-being
ll b i f
functioning
ti i lif
life
Draft Structure of Accounts

Social well-being

Supportive relationships Trust & Belongingness

Challenges in Creating Indexes
¾ Questions with different response
codes
¾ Skewed distributions in responses
¾ Creating recognisably meaningful
numbers
Different
e e t Response
espo se Codes
All things considered, how satisfied are you with
your life
lif as a whole
h l nowadays?
d ?
Extremely Extremely
0 1 2 3 4 5 6 7 8 9 10
Dissatisfied Satisfied

How
o often
o te in tthe
e last
ast week
ee was
as you
your s
sleep
eep restless?
est ess

None or
Some of the Most of the All or almost
almost none
time time all of the time
of the time
1 2 3 4
Standardisation
Histogram of ZWBI
ESS3 working file (with Transformations).sta 284v*34911c
ZWBI = 33009*0.5*normal(x, -0.0671, 0.4847)
14000

12000

10000
No of obs

8000

6000

4000

2000

0
-3.5
35 -3.0
30 -2.5
25 -2.0
20 -1.5
15 -1.0
10 -0.5
05 00
0.0 05
0.5 10
1.0 15
1.5 20
2.0

ZWBI
Skewed distributions
Histogram of ZWBI
ESS3 working file (with Transformations).sta 284v*34911c
ZWBI = 33009*0.5*normal(x, -0.0671, 0.4847)
14000

12000

10000
No of obs

8000

6000

4000

2000

0
-3.5
35 -3.0
30 -2.5
25 -2.0
20 -1.5
15 -1.0
10 -0.5
05 00
0.0 05
0.5 10
1.0 15
1.5 20
2.0

ZWBI
Normalisation
Histogram of TWBI
ESS3 working file (with Transformations).sta 284v*34911c
TWBI = 33009*10*normal(x, 49.5884, 12.9825)
10000

9000

8000

7000

6000
obs
No of o

5000

4000

3000

2000

1000

0
-10 0 10 20 30 40 50 60 70 80 90 100 110

TWBI
Meaningful Scales
Histogram of TWBI
ESS3 working file (with Transformations).sta 284v*34911c
TWBI = 33009*10*normal(x, 49.5884, 12.9825)
10000

9000

8000

7000

6000
obs
No of o

5000

4000

3000

2000

1000

0
-10 0 10 20 30 40 50 60 70 80 90 100 110
0 5
TWBI 10
Challenges in Creating Indexes
¾ Questions with different response
codes - STANDARDISE
¾ Skewed distributions - NORMALISE
¾ Creating recognisably meaningful
numbers – TRANSFORM
Preliminary Results

60
6.0

5.5 Eastern
UK and Ireland
5.0 Western
Southern
4.5 Scandanavia

4.0
Personal Social
Preliminary Results
6.0
Denmark

58
5.8 Norw ay
y

Spain
5.6 Sw itzerland
Sw eden
5.4 Ireland
Portugal Netherlands
Finland
5.2 Austria
Hungary

5.0 Bulgaria Estonia Belgium

UK Cyprus
Social
S

Germany
4.8
Poland France Slovenia
Ukraine Slovakia
4.6

4.4

4.2

4.0
4.0 4.2 4.4 4.6 4.8 5.0 5.2 5.4 5.6 5.8 6.0

Personal
A High Scoring Nation

Denmark

Em otional (positive)
70
7.0
Work 6.0 Em otional (negative)

5.0
4.0
Com m unity Vitality
3.0

Relationships Resilience & self-esteem

Satisfying life Positive functioning

A Low Scoring Nation

Hungary
Emotional (positive)
7.0
Work 6.0 Emotional (negative)

5.0

4.0
Community Vitality
30
3.0

Relationships Resilience & self-esteem

Satisfying life Positive functioning

Within a Nation
Age 15 to 24 (UK)

Em otional (positive)
7.0

Com m unity 6.0 Em otional (negative)

5.0
4.0

Relationships 3.0 Vitality

Older People - UK
Satisfying life Resilience & self-esteem

P iti functioning
Positive f ti i Age 75 plus (UK)

Em otional (positive)
7.0
Young People - UK Com m unity 6.0 Em otional (negative)
5.0
4.0
Relationships 3.0 Vitality

Satisfying life Resilience & self-esteem

Positive functioning
How might NAWB be used?
Looking backwards:
¾ Assess changes over time
¾ Review and evaluate policy decisions
¾ Draw comparisons (internationally)
( )
¾ Assess differences (between sub-populations)

L ki forwards:
Looking f d
¾ Identify areas of need or opportunity
¾ Evaluate the potential impacts of policy proposals
¾ Shape policy formation (content & delivery)
¾ Inform targeting of new policy (sub-populations)
Potential benefits of NAWB
1. New way of directly assessing
societal
i t l progress
2. Cross cutting approach to radically
redesign the policy formation
process
3. Better communication &
engagement between national
governments and the general
p
public
National Accounts of Well-being

To be launched Januaryy 2009

Reports downloadable from

www.neweconomics.org
Ni M
Nic Marks:
k
nic.marks@neweconomics.org