Individual Wellbeing, Social Relations, and Satisfaction: A Beyond GDP Perspective PDF

Individual wellbeing, social relations and satisfaction: a beyond GDP perspective Plinio Limata [email protected] Human Development and Well-being The concept of Human Development challenges the traditional development vision, which identifies that the higher the (rational and fully informed) consum...

Individual wellbeing, social relations and satisfaction: a beyond GDP perspective Plinio Limata [email protected] Human Development and Well-being The concept of Human Development challenges the traditional development vision, which identifies that the higher the (rational and fully informed) consumers’ consumption, the higher their well-being or utility.  new framework(s) aimed at measuring, analyzing, and operationalizing the appropriate measures of well-being, where the economic sphere is only one of the dimensions for a worthwhile life.  GDP growth Well-being growth The debate on Beyond GDP “The welfare of a nation can scarcely be inferred from a measurement of national income.” (Simon Kuznets on GDP and wellbeing, 1934) The debate on Beyond GDP “The gross national product measures everything except that which makes life worthwhile.” (R. Kennedy, 1968, Kansas University) The debate on Beyond GDP "It is not enough for us to talk about freedom, climate change, health, security and the environment. We need widely accepted communication tools that show progress in these fields. And that progress can only be measured with suitable indicators. So it's time to go beyond the tools developed for the very different world of the 1930s. It's time to go beyond today's confusing surfeit of unorganised data. It's time to go beyond GDP." (José Manuel Barroso, 2007) The Stiglitz-Sen-Fitousse Commission In 2008, President Sarkozy nominated the Stiglitz-Sen-Fitoussi Commission on “the Measurement of Economic Performance and Social Progress.” The Report delivered is considered a milestone of the debate “Beyond GDP.” i) GDP is not appropriate to measure human progress; it does not consider social inequality and environmental issues. ii) neither Production is appropriate to measure economic well-being, for which other variables like consumption, household income, or material deprivation can be used iii) beyond the economic side, other well-being dimensions need to be considered to measure the quality of life (e.g., health, social relations, good governance). iv) official statistics are in charge of this process. “what we measure affects what we do: if our measures are misleading, our decisions are misleading too.” Measures of Subjective Well-being There is a research stream that fosters subjective measures of well-being as good proxies for Quality of Life. The better way to look at well-being is to ask people. "Taken all together, how would you say things are these days? Would you say that you are...?" (3) Very Happy, (2) Pretty Happy, and (1) Not too Happy. With reference to the last 12 months, how satisfied are you with your life as a whole? Or… With your friendship? Your health? Your job? And so on… Measures of Subjective Well-being Some criticisms of this approach: Adaptive preferences Happy slave Paradox Positionality Measures of Subjective Well-being The Easterlin paradox (1974). From 1973 to 2003, the GDP doubled in the US while happiness remained constant. Indeed, additional income doesn’t mean additional happiness beyond a certain subsistence income level! “At a point in time, happiness varies directly with income, both among and within nations, but over time the long-term growth rates of happiness and income are not significantly related. The principal reason for the contradiction is social comparison” Measures of Objective Well-being  Another stream of research prefers to rely on objective measures of well-being. Namely the actual health status, the educational level, the occupational outcome, the quantity/quality of relations, and so on.  However, some normative choices and assumptions are essential to design an objective framework of Quality of Life. Measures of Objective Well-being Some criticisms to this approach: − Paternalism − Complexity − Usability for policy purposes and Communicability Capabilities and Functionings A different approach to wellbeing The Capability Approach Sen criticizes the limited informational bases of the traditional models and evaluative accounts (i.e., utilitarianism and resourcism). What is missing is a notion of what activities we can undertake (‘doings’) and the kinds of persons we can be (‘beings’). Sen calls this notion capabilities. Capabilities are the real freedoms people have to achieve their potential doings and beings. Thus, the capability approach changes the focus from means (the resources people have and the public goods they can access) to ends (what they are able to do and be with those resources and goods). (Amartya Sen, Nobel prize, 1998) “Equality of What?” It is essential to look at the heterogeneity of human beings if we seek to enhance their capabilities. Attributes and qualities differ internally or externally and can be classified into five areas: 1. Personal heterogeneities (disability, illness, age, or gender) and needs diversification. 2. Environmental diversities. 3. Variations in social climate –social conditions, including public education and the prevalence or the absence of crime and violence in the particular location. 4. Differences in relational perspectives – the commodity requirements of established behavior patterns may vary between communities, depending on convention and customs. 5. Distribution within the family – the income earned by one or more family members is shared by all – non-earners and earners. The well-being or freedom of individuals in a family will depend on how the family income is used to further the interests and different objectives of the family members. (Sen, Amartya, 1999. Development as Freedom. Oxford: Oxford University Press.) “Equality of what?” Sen’s Capability Approach addresses the problem of inequality and makes a paradigm-shifting distinction between equality in terms of primary goods and equality in terms of capabilities. Human development should be founded on freedom and not on economic wealth. It is a moral imperative and should be realized under the framework of democracy. Capability is a kind of freedom: the substantive freedom to achieve the things a person may value doing and being (Sen 1999, 75) Evaluations regarding equality “should not solely be based on people’s command of resources, sense of happiness or desire fulfillment, but should include features of the way people actually live” (Gore 1997, 236) *Gore, Charles, 1997. Irreducibly Social Goods and the Informational Basis of Sen’s Capabilities Approach. Journal of International Development 9 (2): 235-250. Well-being  Well-being is a matter of what people can do and be and, thus, the kind of life they can effectively lead.  Functionings are “doings and beings,” that is, various states of human beings and activities a person has achieved, such as being well-nourished, getting married, being educated, and traveling.  Capabilities are the real, or substantive, opportunities they have to achieve these doings and beings. The Capability Approach Sen approaches the concept of inequality, relying on “basic capabilities equality.” Human life and Human well-being are a mix of human functionings. The achievement of those functionings takes shape through individual capabilities and external opportunities. Capabilities are defined as conversion factors (personal, social, and environmental) through which marketable and nonmarketable goods and services can be used. In this context, human beings must have equal possibilities and equal opportunities to function. With equal opportunities, people can freely express their capabilities, reaching the functionings mix and well-being. The Capability Approach Personal Capabilities internal to a person (metabolism, physical condition, sex, reading skills, or intelligence) Social capabilities conversion factors coming from the society (public policies, social norms, etc..) Environmental Capabilities conversion factors emerge from the physical or built environment in which a person lives human functionings (being healthy, being educated, being safe, etc..) The Capabilities Approach There are two different purposes of the capability approach: for comparative quality of life assessment and as a theory of social justice. Nussbaum's work exemplifies the second purpose, and Amartya Sen’s work the first purpose Nussbaum uses the capabilities approach in constructing a theory of basic social justice. Martha Craven Nussbaum The core capabilities that all democracies should support are: 1. 2. 3. 4. 5. 6. 7. Life. Bodily Health. Bodily integrity. Senses, Imagination, and Thought. Emotions. Practical Reason. Affiliation. 1. Being able to live with and toward others, to recognize and show concern for other humans, to engage in various forms of social interaction; to be able to imagine the situation of another. 2. Having the social bases of self-respect and non-humiliation; being able to be treated as a dignified being whose worth is equal to that of others. This entails provisions of non-discrimination based on race, sex, sexual orientation, ethnicity, caste, religion, national origin and species. The core capabilities that all democracies should support are: 8. Other Species. 9. Play. 10. Control over one's Environment. 1. Political. Being able to participate effectively in political choices that govern one's life, having the right of political participation, and protections of free speech and association. 2. Material. Being able to hold property (both land and movable goods), and having property rights on an equal basis with others, having the right to seek employment on an equal basis with others, having the freedom from unwarranted search and seizure. In work, being able to work as a human, exercising practical reason, and entering into meaningful relationships of mutual recognition with other workers. The best countries to live in Measurement examples International frameworks United Nations Human Development Index OECD Better life Index Eurostat Quality of life indicators United Nations MDG’s – SDG’s National Experiences Canadian Index of Well Being Measuring Australia’s Progress Measuring national well-being in UK Centre for Bhutan Studies Gross National Happiness Italian BES born by a joint initiative of Cnel and Istat and the process have involved experts from universities, politics and great attention was focused on civil society. The framework is built on 134 indicators divided in 12 domains. BES – Benessere Equo e Sostenibile Well-being is a multidimensional concept that changes according to time, place, and culture. The identification of dimensions and indicators to measure such a concept is always an exercise that reflects the norms, values, and priorities of those who participate in the selection process In Italy, we adopted a complex approach to share all decisions at every step not only with the experts but with the civil society at large In our opinion, only a shared approach can guarantee legitimacy to the measures of wellbeing BES - Overview Project to measure equitable and sustainable well-being born of a joint initiative of Cnel and Istat Part of the international debate on "Gdp and beyond“ The central idea is that economic parameters alone are inadequate to evaluate the progress of societies and should be complemented by social and environmental information and by measures of inequality and sustainability 12 domains of wellbeing and 134 indicators Annual Reports For more info check the website BES - The Process Annual survey on what is important for wellbeing (24k households) Steering Committee 12 Domains Online survey and Blog Discussion Meetings in every region and Blog Scientific Commission 134 Indicators Annual report BES – Wellbeing domains The individual sphere The context BES – Policy utilizations Policy utilizations at different levels Local Regions Provinces Municipalities National Global Ministry of Economy -DEF-PNR Ministry of Environment. United Nations: FOC Ministry of Env Ministry of Foreing Affairs Eurostat: SD strategy, Europe 2020 The BES in the DEF ❖ Since 2016, with law 163/2016 (art. 14) , the BES framework became a tool for policy planning. ❖ The law prescribes to use 12 BES indicators (personal income; inequality index; absolute poverty; life expectancy in good health; obesity; education drop out; unemployment rate; crime rate; co2 emissions..), besides the traditional macroeconomic indicators, to evaluate public policies. This is aimed at evaluating the impact of policies on the overall well-being. ❖ This rule implies that, every year, the Ministry has to present the evolution of such indicators under the upcoming reforms and the projection for the forthcoming 3 years. BES – Why Sustainable? - Pursuit of sustainable development implies that the current generation meets its needs without compromising the ability of future generations to do the same - This implies that future generations have the conditions, opportunities, and sufficient resources to pursue their well-being goals - Key issues: uncertainty, complexity, dynamic, global-local, inter-linkages (insecurity, more disciplines, time, space, sustain with cross effects) BES – What, observations-indicators - The BES project has depicted the reference frame through which sustainable well-being can be measured and monitored looking at social, economic and environmental phenomena and taking into consideration governance. - Observations + forward looking models - The framework is built on 134 indicators + others : Outcome indicators Equity indicators Vulnerability indicators Resilience indicators BES - Conceptual framework of Sustainability Vulnerability Risk factors Resilience Capabilities - Environmental - Economic - Social Capitals Interrelations among domains BES – What: Key concepts Risk factors Events and potential damages which affect the actual outcome level. They need to be expressed in terms of probability measures and/or intensity indicators. Environmental: ecosystem’s physical limit beyond which the environment is damaged. Economics: some risks threshold have been defined beyond which macroeconomics unbalances appear. Vulnerability Individuals and families are exposed to potential misfortunes from various sources throughout their lives: economic recession, crimes, adverse weather, natural disasters, physical illnesses and/or mental disabilities. The vulnerability also refers to the inability of individuals/families to anticipate, withstand, recover damages resulting from an adverse shock BES – What: key concepts RESILIENCE: Individual or collective capacity to restore the equilibrium after an external negative shock all the available resources to rely on in order to face with future needs and/or future risks. There are four kind of capital: economic capital, natural capital, human capital and social capital. Capitals Capabilities reflect a person’s freedom and ability to choose between different ways of living in order to reach the functionings (all the personal achievement). Social relations In the BES framework, this dimension is mostly related to the concept of SOCIAL CAPITAL Some indicators are: satisfaction with family relations or friends ; People to rely on; Social participation; Civic and political participation; Voluntary activity; Association funding; No-profit organizations; Generalized trust The dimension of FAMILY is not assessed, however… Happiness, Well-being, and the Family Are married couples happier, healthier, psychologically, or economically advantaged? Do children improve parents’ well-being? If so, which type of well-being? Literature Review (1) Happiness, Well-being, and the Family Health & Marriage People supported by close relationships are more likely to live longer and healthier. Wealth & Marriage married people afford better housing, food and services and report job advantages Literature Review (1) Happiness, Well-being, and the Family Happiness /Psychological wellbeing & Marriage Married people result happier and more satisfied Married people present mental health advantage and lower distress outcomes. Parenthood And Wellbeing Are parents happier ? It depends.. Agenda 2030 and SDGs The Goals and targets will stimulate action over the next fifteen years in areas of critical importance for humanity and the planet:  People We are determined to end poverty and hunger, in all their forms and dimensions, and to ensure that all human beings can fulfil their potential in dignity and equality and in a healthy environment.  Planet We are determined to protect the planet from degradation, including through sustainable consumption and production, sustainably managing its natural resources and taking urgent action on climate change, so that it can support the needs of the present and future generations.  Prosperity We are determined to ensure that all human beings can enjoy prosperous and fulfilling lives and that economic, social and technological progress occurs in harmony with nature.  Peace We are determined to foster peaceful, just and inclusive societies which are free from fear and violence. There can be no sustainable development without peace and no peace without sustainable development.  Partnership We are determined to mobilize the means required to implement this Agenda through a revitalised Global Partnership for Sustainable Development, based on a spirit of strengthened global solidarity, focused in particular on the needs of the poorest and most vulnerable and with the participation of all countries, all stakeholders and all people. The interlinkages and integrated nature of the Sustainable Development Goals are of crucial importance in ensuring that the purpose of the new Agenda is realised. If we realize our ambitions across the full extent of the Agenda, the lives of all will be profoundly improved and our world will be transformed for the better. Sustainable Development Goals It’s a Political Agenda upon which countries have agreed. Composed of 17 goals and 169 targets. Addressed to Developed countries and Developing countries There is a Global level but also a Regional, National, and Subnational level Each country is asked to pursue the agenda according to its specificities and program The agenda can be pursued through top-down policies, but also bottom-up actions are essential (companies, civil society, critical consumption, consumer behavior) The measurement framework is designed in more than 240 indicators (global, regional, and national indicators). Each country needs to produce such indicators and monitors the progress References  Nussbaum, M., and Sen, A. (Eds.). (1993). The quality of life. Oxford University Press.  Sen, A. K. (1980). Equality of What?, in S. McMurrin (ed.), Tanner Lectures on Human Values. Cambridge: Cambridge University Press, 197–220.  Sen, A. K., (1983). Poor, Relatively Speaking. Oxford Economic Papers, No. 37, pp. 669–76, Reproduced in Sen, A.K. 1984, pp. 325–345.  Sen, A. (1992). Inequality re-examined. Oxford: Clarendon Press.  Sen, A. K. (2009). The idea of justice. Harvard University Press.  Stiglitz, J. E., Sen, A., & Fitoussi, J. P. (2009). Report by the commission on the measurement of economic performance and social progress.  Jean-Paul, F., & Martine, D. (Eds.). (2018). For Good Measure Advancing Research on Well-being Metrics Beyond GDP: Advancing Research on Well-being Metrics Beyond GDP. OECD Publishing.  World Happiness report (https://worldhappiness.report ). Some other papers on relationships and happiness  Bruni, L., & Stanca, L. (2008). Watching alone: Relational goods, television and happiness. Journal of Economic Behavior & Organization, 65(3-4), 506-528.  Bruni, L., De Rosa, D., & Ferri, G. (2019). Cooperatives and happiness. Cross-country evidence on the role of relational capital. Applied Economics, 51(30), 3325-3343.  Colombo, E., Rotondi, V., & Stanca, L. (2018). Macroeconomic conditions and well-being: do social interactions matter?. Applied Economics, 50(28), 3029-3038.