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Beyond GDP and Back: What Is the Value-Added by Additional Components of Welfare Measurement?

Author

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  • Sonja C. Kassenböhmer
  • Christoph M. Schmidt
Abstract
Recently, building on the highly polarizing Stiglitz report, a growing literature suggests that statistical offices and applied researchers explore other aspects of human welfare apart from material well-being, such as job security, crime, health, environmental factors and subjective perceptions. To explore the additional information of these indicators, we analyze data on the macro level from the German Federal Statistical Office combined with micro level data from the German SOEP (1991-2008) on the personal work situation and subjective feelings concerning several aspects of life. Employing the indicators suggested by the Stiglitz Report, we find that much of the variation in many well-being measures can indeed be captured well by the hard economic indicators as used in the literature, especially by GDP and the unemployment rate. This suggests that the hard indicators are still a reasonable and quite robust gauge of well-being of a country. And yet, we also see that these correlations are far from perfect, thus giving considerable hope that there is room for a broader statistical reporting.

Suggested Citation

  • Sonja C. Kassenböhmer & Christoph M. Schmidt, 2011. "Beyond GDP and Back: What Is the Value-Added by Additional Components of Welfare Measurement?," SOEPpapers on Multidisciplinary Panel Data Research 351, DIW Berlin, The German Socio-Economic Panel (SOEP).
    • Handle: RePEc:diw:diwsop:diw_sp351
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    References listed on IDEAS

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    10. repec:zbw:rwirep:0031 is not listed on IDEAS
    11. Ulrich van Suntum & Aloys Prinz & Nicole Uhde, 2010. "Lebenszufriedenheit und Wohlbefinden in Deutschland: Studie zur Konstruktion eines Lebenszufriedenheitsindikators," SOEPpapers on Multidisciplinary Panel Data Research 259, DIW Berlin, The German Socio-Economic Panel (SOEP).
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    Cited by:

    1. Delhey, Jan & Kroll, Christian, 2012. "A "happiness test" for the new measures of national well-being: How much better than GDP are they?," Discussion Papers, Research Unit: Inequality and Social Integration SP I 2012-201, WZB Berlin Social Science Center.
    2. Christoph M. Schmidt & Nils aus dem Moore, 2014. "Wie geht es uns? Die W3-Indikatoren für eine neue Wohlstandsmessung," RWI Positionen, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, pages 16, 03.
    3. Olha Hlushchenko, 2016. "Well-being funding: essence and estimation method," RIVISTA DI STUDI SULLA SOSTENIBILITA', FrancoAngeli Editore, vol. 2016(2), pages 45-55.
    4. D.P. Doessel & Ruth F.G. Williams, 2012. "The New Welfare Measures," Working Papers 2012.07, School of Economics, La Trobe University.
    5. Jörg Döpke & Andreas Knabe & Cornelia Lang & Philip Maschke, 2017. "Multidimensional Well-being and Regional Disparities in Europe," Journal of Common Market Studies, Wiley Blackwell, vol. 55(5), pages 1026-1044, September.
    6. Schmidt, Christoph M. & aus dem Moore, Nils, 2014. "Wie geht es uns? Die W3-Indikatoren für eine neue Wohlstandsmessung," RWI Positionen 56, RWI - Leibniz-Institut für Wirtschaftsforschung.
    7. da Silva Francisco, António A., 2017. "‘Gerontogrowth’ and population ageing in Africa and the Global AgeWatch Index," The Journal of the Economics of Ageing, Elsevier, vol. 9(C), pages 78-89.
    8. Olivier Bargain & André Decoster & Mathias Dolls & Dirk Neumann & Andreas Peichl & Sebastian Siegloch, 2013. "Welfare, labor supply and heterogeneous preferences: evidence for Europe and the US," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 41(4), pages 789-817, October.
    9. Johannes Hirata, 2012. "Zum systematischen Stellenwert von Wirtschaftswachstum: Ziel, Mittel oder weder noch?," RatSWD Working Papers 198, German Data Forum (RatSWD).
    10. repec:zbw:rwipos:056 is not listed on IDEAS
    11. Petar Mitić & Olja Munitlak Ivanović & Aleksandar Zdravković, 2017. "A Cointegration Analysis of Real GDP and CO 2 Emissions in Transitional Countries," Sustainability, MDPI, vol. 9(4), pages 1-18, April.
    12. Bofinger, Peter & Buch, Claudia M. & Feld, Lars P. & Schmidt, Christoph M. & Wieland, Volker, 2013. "Gegen eine rückwärtsgewandte Wirtschaftspolitik. Jahresgutachten 2013/14 [Against a backward-looking economic policy. Annual Report 2013/14]," Annual Economic Reports / Jahresgutachten, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung, volume 127, number 201314.
    13. Erich Oltmanns & Albert Braakmann & Joachim Schmidt, 2014. "Monitoring Subjective Well-Being: Some New Empirical Evidence for Germany," SOEPpapers on Multidisciplinary Panel Data Research 696, DIW Berlin, The German Socio-Economic Panel (SOEP).

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    More about this item

    Keywords

    Stiglitz Commission; Stiglitz Report; Beyond GDP; welfare measurement; life satisfaction;
    All these keywords.

    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis

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