What Matters Most to People? Evidence from the OECD Better Life Index Users’ Responses

Abstract

The OECD Better Life Index is an interactive composite index that aggregates a country's well-being outcomes through the weights defined by online users. This paper analyses these weights by analysing the responses given by close to 88,000 users since 2011 to date. The contribution of this paper is threefold. First, it investigates the factors shaping users' preferences over a set of 11 well-being dimensions, while most of the previous empirical works in the area have focused on factors affecting support for a specific well-being domain (e.g. redistribution, environmental concerns) at a time. Second, it provides insights into users' preferences for a large group of countries, which differ in terms of culture and living conditions. Third, a finite mixture model (FMM) approach is used to test for heterogeneity in the effect of satisfaction levels on the weight attached to a given BLI dimension across sub-population groups. Various empirical models are used to identify responses' patterns and see whether they can be accounted for respondents' characteristics and their perceived level of well-being. The paper finds that health, education and life satisfaction are the aspects that matter the most in OECD countries. Descriptive statistics show that men assign more importance to material conditions than women; while women in general value quality of life more than men. Environment, housing, civic engagement, safety and health become more important with age, while life satisfaction, education, work-life balance, jobs and income are particularly important for those younger than 35. There are also regional patterns in users' findings, for instance civic engagement is particularly important in South America, while safety and work-life balance matter tremendously in Asia-Pacific. Furthermore, an additional analysis carried out on a subset of observations finds that for several well-being dimensions (i.e. jobs, housing, community, health, education, civic engagement, safety, life satisfaction and work-life balance) there is a positive and linear relationship between individual preferences and self-& Elena Tosetto

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“…natural resources, biodiversity, climate), and social capital. Drawing upon recommendations made by Stiglitz et al (2009), the OECD constructed a so-called "Better Life Index" (BLI) which complements income and life satisfaction with nine other dimensions of well-being: housing, jobs, community, education, civic engagement, environment, health, work-life balance, and safety (Mizobuchi 2014;Durand 2015;Peiró-Palomino and Picazo-Tadeo 2018;Balestra et al 2018).…”

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“…Organisation for Economic Co‐operation and Development (); see also Balestra et al . ()). Based on the individuals’ relative weights and the objectively measured indicators, the BLI facilitates the computation of national indices of wellbeing.…”

“…() and Balestra et al . ()). In addition, the Austrian Government employed a domestic version of the BLI to assess its citizens’ policy priorities (Österreichisches Institut für Wirtschaftsforschung, ).…”

“…The OECD reports the averages of the dimensions' relative ratings for a wide range of countries and demographic subgroups (e.g. Organisation for Economic Co-operation and Development (2011, 2015; see also Balestra et al (2018)). Based on the individuals' relative weights and the objectively measured indicators, the BLI facilitates the computation of national indices of wellbeing.…”

“…They also constitute an influential contribution to the on-going scientific debate on welfare measurement (e.g. Boarini and D'Ercole (2013), Delhey and Kroll (2013), Mizobuchi (2014), Durand (2015), Decancq (2017), Marković et al (2016) and Balestra et al (2018)). In addition, the Austrian Government employed a domestic version of the BLI to assess its citizens' policy priorities (Österreichisches Institut für Wirtschaftsforschung, 2012).…”