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Sustainable economic policy and well-being: The relationship between adjusted net savings and subjective well-being

Author

Listed:
  • Mubashir Qasim

    (University of Waikato)

  • Arthur Grimes

    (Motu Economic and Public Policy Research)

Abstract
We analyse the relationship between subjective wellbeing (SWB) and the World Bank’s measure of a country’s economic sustainability, adjusted net savings (ANS). We model SWB at individual level and at aggregated group level as a function of past ANS levels, after controlling for a country’s initial levels of SWB. The empirical models utilise World Values Surveys (WVS) data for self-reported life-satisfaction (our proxy for SWB). Our results show that ANS is negatively associated with future SWB outcomes over relatively short timespans (10-15 years) but this relationship is neutralised, or even reversed, for a longer timespan (20 years). The results demonstrate an important challenge in political economy. Governments that choose to save less in the short term may be able to spend more on the well-being of the current generation (i.e. current voters) but they diminish the reserves available to improve future generations’ well-being. At a more technical level, our results reinforce the concept that ANS is a useful sustainability indicator for infinite (or at least very long) time horizons, but it is not a good indicator of well-being developments over short time horizons.

Suggested Citation

  • Mubashir Qasim & Arthur Grimes, 2018. "Sustainable economic policy and well-being: The relationship between adjusted net savings and subjective well-being," Working Papers 18_06, Motu Economic and Public Policy Research.
    • Handle: RePEc:mtu:wpaper:18_06
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    References listed on IDEAS

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    2. Conceição Castro & Cristina Lopes, 2022. "Digital Government and Sustainable Development," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(2), pages 880-903, June.
    3. Larry Dwyer, 2023. "Why tourism economists should treat resident well-being more seriously," Tourism Economics, , vol. 29(8), pages 1975-1994, December.
    4. Mubashir Qasim, 2018. "Some Links between Sustainability and Well-Being," Working Papers in Economics 18/13, University of Waikato.
    5. Ellalee, Haider & Al-Qaysi, Israa I., 2023. "Digital Government a Pathway to Sustainable Development," MPRA Paper 118178, University Library of Munich, Germany, revised Aug 2023.
    6. Serap TAŞKAYA, 2020. "Impact of the Provinces’ Gross Domestic Product Per Capita on the Better Life Index: An Analysis at the Level of Provinces Abstract: Recent studies on determining the impact of income on quality of li," Sosyoekonomi Journal, Sosyoekonomi Society, issue 28(45).
    7. Batrancea Larissa & Rathnaswamy Malar Maran & Batrancea Ioan & Nichita Anca & Rus Mircea-Iosif & Tulai Horia & Fatacean Gheorghe & Masca Ema Speranta & Morar Ioan Dan, 2020. "Adjusted Net Savings of CEE and Baltic Nations in the Context of Sustainable Economic Growth: A Panel Data Analysis," JRFM, MDPI, vol. 13(10), pages 1-17, October.
    8. Mubashir Qasim, 2019. "Sustainability and Wellbeing: A Text Analysis of New Zealand Parliamentary Debates, Official Yearbooks and Ministerial Documents," Working Papers in Economics 19/01, University of Waikato.

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    More about this item

    Keywords

    Adjusted net savings; subjective wellbeing; intergenerational sustainability;
    All these keywords.

    JEL classification:

    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • N97 - Economic History - - Regional and Urban History - - - Africa; Oceania

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