An Index of Economic Well–Being for Selected OECD Countries

Abstract

Per capita gross domestic product (GDP) is a poor indicator of economic well–being. It measures effective consumption poorly (ignoring the value of leisure and of longer life spans) and it also ignores the value of accumulation for the benefit of future generations. Since incomes are uncertain and unequally distributed, the average also does not indicate the likelihood that any particular individual will share in prosperity or the degree of anxiety and insecurity with which individuals contemplate their futures. We argue that a better index of economic well–being should consider: current effective per capita consumption flows; net societal accumulation of stocks of productive resources; income distribution; and economic security. The paper develops such an index of economic well–being for the U.S., U.K., Canada, Australia, Norway and Sweden for the period 1980 to 1999. It compares trends in economic well–being to trends in GDP per person. In every case, growth in economic well–being was less than growth in GDP per capita, although to different degrees in different countries.

The effect of economic insecurity on mental health: Recent evidence from Australian panel data

“…However the concept can be operationalized by measuring specific phenomena that are likely to be stressful and combining these indicators with the aim of inferring the resultant sense of anxiety. Economic insecurity is thus seen as a multidimensional concept that includes (alongside job insecurity) the risk of poverty (Bandyopadhyay & Cowell, 2007;Calvo & Dercon, 2005), income volatility Smith, Stoddard & Barnes, 2011;Rohde, Tang & Rao, 2014), bankruptcy (Kalleberg, 2009), loss through family dissolution, crime or widowhood (Western, Bloom, Sosnaud & Tach 2013;Osberg & Sharpe, 2002), wealth dynamics (Bossert & D'Ambrosio, 2013;D'Ambrosio & Rohde, 2014) and lack of access to insurance, in particular health insurance (Dominitz & Manksi, 1997;Bucks, 2011;Hacker, 2006;Hacker et al, 2010). At the aggregate level phenomena such as business cycles (Stuckler et al, 2011) and exposure to international competition (Scheve & Slaughter, 2004;Standing, 1997) are also relevant.…”

“…Further, there is evidence that economic insecurity has been intensifying over recent years (Hacker et al, 2010), a trend which predates the crisis of 2008. Indeed in most developed countries measures of consumer confidence have been declining since the late 1990s, while studies by Hacker (2006), Osberg and Sharpe (2002), Sharpe and Osberg (2009) and Nichols and Rehm (2014) show that this downward trend has been matched by increases in household level economic risk.…”

A Comparison of Inequality and Living Standards in Canada and the United States Using an Expanded Measure of Economic Well-Being

“…This index is composed of four sub-indices: per-capita consumption, per-capita wealth, economic equality, and economic security. These four domains are designed to reflect the distribution of resources and the average ability to access them in both the present and the future (Osberg and Sharpe 2009). Equal weights are usually applied to all four components.…”

Is GDP an Appropriate Indicator of Economic Performance and Social Progress in the Context of Globalization?

“…Největší pozornost je věnována ekonomickému přístupu založenému na ekonomické teorii blahobytu a tržní [Osberg, Sharpe, 2002]. S konstrukcí tohoto indexu i s dosaženými výsledky měření se nyní seznámíme podrobněji.…”