Tag Archives: Statistics

Social progress: a better way to measure a good society

For too long, Gross Domestic Product (GDP) has been the king of the indicators for public policy. Money makes the world go round. And GDP measures it. GDP emerged in the 1930s as a metric to measure the size of national accounts and inform policy makers’ decisions. Since, it has developed into a tool to benchmark countries’ performance: GDP growth is equated to progress.

GDP and beyond

Within the beyond GDP movement, many people have challenged this dominance, arguing that a good society is a lot more than economic performance. Social and environmental externalities are discounted in GDP. For instance, economists calculated that the Gulf of Mexico oil spill resulted in a higher GDP! And even GDP’s creator, economist Simon Kuznets, was aware of these limitations. When preparing the pile of statistic data for the US Congress in 1933, he noted that:

The welfare of a nation can scarcely be inferred from a measurement of national income.

Since, many have challenged the dominance as a benchmark in the countries’ annual performance reviews. Most competing indices aim to rebalance GDP, by providing economic performance and add other data in areas as social matters, environment and education. This is the case for indicators like the Humanitarian Development Index (HDI), the OECD’s Better Life Index and Bhutan’s Gross National Happiness.

And further beyond… all economic data!

The Social Progress Index (SPI), however, has a different approach.

The SPI differentiates itself from other challengers to GDP by its unique conceptual choice to stay away from economic data. Instead, it measures social progress via 52 concrete outcomes assessing three key indicators to measure progress: basic human needs, ‘foundations of well-being’, and opportunity (see more in this eloquent TEDx talk).

These concepts are assessed via a series of questions asking about people’s experiences in many aspects that matter for quality of life: how many people have shelter and sufficient water? Do people live in a sustainable ecosystem? How many people experience discrimination? Survey data allow to compare such outcomes based on what people feel, rather than by measuring social issues via public expenditure or laws.

 

Source: data from Social Progress Imperative, available here.

Social progress does not equate happiness

The SPI does not measure happiness or aim to do so. Still, a glance at the wealth of data produced by the SPi suggest that their ranking broadly overlaps with the data from the World Happiness Report. All the top time countries are the same, but in a different order. Switzerland, Iceland and Denmark form the top-three in happiness; for social progress it’s Norway, Sweden and Switzerland.

But there are some differences: especially Latin American countries seem to rank lower in the SPI. Countries like Costa Rica, Mexico, Brazil, Venezuela and Panama benefit from a ‘Latin American happiness bonus and make it to the top-25 in happiness, but fall short of the top-25 in social progress. To the contrary, some highly developed countries (Germany, France, Japan, South Korea) combine lower levels of happiness with higher levels of social progress.

A different data set for policy makers 

The main use of SPI as a policy tool is that it is adds knowledge on progress without building on economic data. From that perspective, it may be surprising that there nevertheless is a solid correlation of 0.78 between GDP and SPI. But SPI allows policy makers to make assessment from a different angle. The main benefit is to identify areas where a country is shortcoming comparing to peers with similar GDP levels, and to strengthen the information base about interventions that can address lower performance.

In recent years, policy makers’ interest in beyond GDP indicators has steadily risen. The SPI is also benefitting from this. The European Commission has started talks to integrate the SPI to monitor regional policy outcomes. And in the US, where social progress and happiness are lagging behind economic strength, several local and state level politicians have started to integrate SPI information in their dashboard of monitored outcomes. For instance, the city of Somerville, Massachusetts, has started analysing tailored SPI analytics on the local level. And in the state of Michigan, social progress indicators are included in a set of key performance indicators.

Data for a good society

This is exactly what alternative indicators should do. GDP has a value. Economic data provide a useful understanding about people’s lives. But if you want to find out what a good society is, and whether you are on an upward or downward trend, there is a lot more to watch. The SPI provides a great contribution to help policymakers find out on which areas they should work to make their country progress.

How happy are we actually in Europe?

Did you feel particularly good last Friday? Maybe you enjoyed #Eclipse2015 as so many others did. Or you felt great because the world was celebrating the International Day of Happiness!

The International Day of Happiness was instituted by the United Nations in 2012, as I wrote last year. I must say that beyond a flood of tweets, I haven’t seen too many official events this year. The exception however was a very interesting data set from Eurostat that answers how happy we actually are in the EU.

I’ll come with the answers soon. But let me first give an idea on how we actually measure happiness.

How do you measure happiness?

There are practically three ways to measure happiness:

  • “Overall, how satisfied are you with your life these days?” With this question, people are asked about their overall quality of life or life satisfaction. There can be a little bias there – I might answer something different today than I would tomorrow. But the experience of researchers is that these biases cancel each other when the sample is large enough.
  • “How much of the time over the past four weeks have you been happy?” This question instead measures positive affect, or people’s happiness level on an emotional rather than on a more rational level. It’s based on the idea that beyond the overall life satisfaction, the presence of positive emotions and the absence of negative emotions is a good indicator of how a person really lives. 
  • Finally, there is ‘eudaimonia’, ‘eudaimonic happiness‘, or ‘meaning of life‘, which has a less clear-cut question. Eudaimonia broadly refers to the value and purpose of life, important life goals, and for some, spirituality. This requires a bit more reflection before it is answered.

Eurostat’s results show that the three measures are correlated at country level and at individual level, with some exceptions. A high level of positive affect is correlated with high life satisfaction and meaning of life. Still, one out of fourteen is ‘happy all of the time’ but with a low level of life satisfaction!

The good news: how happy are we?

There is a lot of good news in the figures:

  • 16 out of 28 countries have an average above 7.0, and the EU average is 7.1 out of 10
  • The highest level of happiness is found in Denmark, Finland and Sweden, with 8.0. The Netherlands and Austria score an 8.
  • On average, young people (16-24) score highest, at 7.6. The outliers are the Austrians: 8.4!
  • In Finland (8.3) and in my own home country, the Netherlands (8.0), the highest bracket is the age group 25-34. Does that mean that statistically, I will never be as happy as I am now? (The answer is: no. The study explains there can also be a ‘cohort effect’ – a group of people could retain the same happiness level, independent of their age group.
  • And the happiest are… Danish seniors! The absolute highest number is found in Danes in the age of 65-74: 8.6, and 0.7 higher than the 50-64 group in Denmark (7.9). There must be something amazing about retirement in Denmark!
  • There is only a marginal difference between men (7.1) and women (7.0). Also, there are slightly more women in the highest category. And controlling for differences in income, marital status, and labour market position, women are happier.
  • 42.1% of Danes scores above 8, and only 5.6% of Dutch score below 6. This might actually be the most important outcome: when it’s about happiness, it is not only the average but also the distribution that should count. In these two countries, happiness seems to be distributed fairly equally.

The bad news: how unhappy are we?

But there also is a bit of bad news in the figures:

  • Generally, happiness levels tend to decline with age: from 7.6 (16-24) to 6.9 (50-64), before making a little rise to 7.0 (65-74) and a further decline to 6.8 (75+)
  • Bulgarians and Serbians appear to be quite miserable: they score averages of 4.8 and 4.9. In Bulgaria, every age group is below 6.
  • Unemployment buys unhappiness. The difference between full-time employment and unemployment is 1.6 points (7.4 vs 5.8).
  • There is also a strong relation between poverty and unhappiness. Only 7.5% of materially deprived people has a high level of life satisfaction. And deprivation of important needs (ability to pay rent, to keep the home warm, a holiday or a car) has a larger negative effect on happiness than poverty in monetary terms.

The full analysis from Eurostat is available here.

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