The Main Approaches to Measuring Progress and Measuring Wellbeing

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The Main Approaches to Measuring Progress and
Measuring Well-being

• Barbara Iasiello Jon Hall
• Global Project, OECD

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• How to Measure Progress?

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• How to Measure Progress
• Three Approaches
• 1. The Accounting Framework Approach
• Extension of traditional economic accounts
  based on GDP, to capture the environment or
  social concerns

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SESAME Approach

• The SESAME can be defined as a detailed and
  integrated statistical information system in
  matrix format, from which a set of core
  (macro-)indicators for different aspects of
  well-being can be derived (Keuning, 1997)
• Usually it includes many indicators as GDP,
  population size, (un)employment, inequality,
  education, environmental indicators, etc.

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Paid employment and self employed persons
Female
Male
Total
Low education
High education
Low education
High education
GDP
Total employm.
Agriculture, forestry and fishing






Mining and manufacturing






Electricity, gas and water supply






Construction






Trade, hotels, restaurants and repair






Transport, storage and communication






Finance and business services






Other commercial services






General government






Care and other service activities






Total






Source Keuning, S., Verbruggen, M., European
Structural Indicators a Way Forward. June 2003.
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• Strengths Weaknesses
• Very powerful tool for analysis
• Investment in terms of the amount of data to be
  collected and the resources needed

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• How to Measure Progress
• Three Approaches
• 2.The One-Number Approach
• Development of composite indicators of progress
  that combine detailed information into a single
  measure

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• The GPI

Subtract real costs (eg defensive expenditure
like prisons)
GDP
Genuine ProgressIndicator
Add uncounted benefits (eg unpaid work, parenting)
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• Strengths Weaknesses
• Powerful tool for advocacy
• Difficulty in aggregating units measured in
  different ways adding apples and oranges, or
  valuing things like parenting in s
• Difficult to interpret the results without
  stepping back to investigate the components

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• How to Measure Well-being
• Three Approaches
• 3. The Suite of Indicator Approach
• Identification of a set of key indicators
  covering economic, social and environmental
  domains

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• Strengths Weaknesses
• It has the advantage of covering a wide range of
  topics, without the need of estimating individual
  weights.
• Can be difficult to interpret
• Can include too much information

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Indicators

• Measures should be unambiguous" that is have a
  clear good/bad direction of movement
• Important to focus on the big picture
• Important to discuss the links between indicators
  .. trade-offs and reinforcements

Life expectancy v
X Numbers of patients treated X
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• Progress Objective and Subjective Components
• Objective components longevity, income, air
  quality

The stuff we can measure exactly
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• Progress Objective and Subjective Components
• Subjective components fear, trust, happiness,
  life satisfaction

Business ConfidenceSelf assessed health
Must ask people how they feel
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• Objective and Subjective Assessments Are
  Important

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Measuring Subjective Well-being

• Arguments For
• Nice organising principle
• Public are interested and a growing demand
• Solid evidence that high subjective wellbeing
  correlates with other hard aspects of wellbeing
  e.g. health

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Happiness and Health

• The Nuns

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Measuring Subjective Well-being

• Arguments Against
• Difficult to measure
• Difficult to find policy relevance for measures
  (at least for generalised measures of life
  satisfaction)
• Doesnt appear to change a great deal over time
  (though there is a life course effect)
• Not appropriate ground for a statistical office

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A Happy Planet Index

• Launched by nef in July 2006
• HDI style rank order of nations
• Measure of the Ecological efficiency with which
  human well-being is delivered
• Over 1,000,000 downloads to date

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What HPI measures
Human system
Ecosystem
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What HPI measures
Human system
Human well-being
Happy and Long Lives
(divided by)
Resource Use
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What HPI measures
Human system
Human well-being
(Life Sat) (Life Exp)
(divided by)
Eco Footprint
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Measuring Progress to Foster Progress
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The benefits

• for citizens
• for policy makers
• for countries

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The benefits for citizens

• Promote accountability and enhance citizen
  engagement
• .improve citizens knowledge giving them the
  opportunity to improve their decision making
  processes and to become more aware of the risks
  and challenges of todays world

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The benefits for policy makers

• Policy makers can better assess the current
  situation, make more informed decisions, and
  measure progress over time and relative to other
  nations
• Better coordination in government
• Data to advocate necessary reforms and evaluate
  their impact on societal welfare

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The benefits for countries

• By highlighting the issues that genuinely matter
  to a society, a set of progress measures can help
  a country best meet the needs of its citizens by
  focussing attention on the key outcomes
• Sunshine is the best disinfectant
• .transparency has the ability to reduce waste,
  prevent corruption, and shift resources where
  theyre truly needed

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Progress Measures Can Help

• Promote greater accountability
• Enhance the quality of public debate
• Help countries prioritize resource allocation

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Progress Measures Can Help

• Enhance democracy
• enhance decision making
• and so generate progress

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• Measuring the Progress of Societies is one of
  the most important roles the OECD can take on
• Angel Gurria, OECD Secretary General
• "World GDP growth has been faster than it has
  been for a very long time. But people are not
  particularly happy"
• Kemal Dervis, Head of UNDP
• " Progress indicators are a way for people to
  hold their governments accountable "
• Francois Bourguignon, Chief Economist of the
  World Bank

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Group Exercise

• The Secretary General of the League of Arab
  States has asked your group to develop a set of
  indicators of progress.

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Your Job is to

• Choose a concept related to progress that covers
  different dimensions eg poverty, social
  cohesion, etc. and explain why it is important
  for progress.
• Discuss what specific aspects of Arabian life
  need to be included in this concept.
• Develop the specific indicators that need to be
  included in the set of indicators.

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Your Job is to

• For example develop indicators of Safety.
  Safety must be defined.
• Safety might be made up of dimensions like
  crime, defense, road accidents each dimensions
  must be measured using an indicator
• Crime could be the homicide rate, the mugging
  rate, people in prison.
• List the specific indicators you want to include
  for measuring Safety

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You have to

• Prepare a five minutes presentation describing
  your set of indicators and why it is important
  for Progress.