Measuring the well-being across countries

Abstract

Dissatisfied with any measure of income as a sufficient indicator of well-being, emphasis has shifted to identification of alternative measures. However, identifying robust Quality of Life (QOL) indicators, or providing a coherent and robust definition of the concept, remains problematic. Over the years, alternative measures of well-being have been suggested. Probably the best-known composite indices of well-being are the Human Development Index and Physical Quality of Life Index (PQLI). These alternative measures are recognized as improvements in terms of representing various dimensions of QOL, but they still suffer from various limitations. Using information on eight indicators of QOL for 43 developing countries of the world, in this article I show that various measures of well-being are highly sensitive to the domains of QOL that are considered in the construction of comparative indices, and also sensitive to how measurable inputs into the well-being are aggregated and weighted to arrive at composite measures of QOL. I find results that support the result obtained by Dasgupta and Weale (1992) that measures of health are closest to overall measure of QOL. Thus, if we had to choose a single domain of aggregate well-being, the domain of health would seem to be the most appropriate.

Acknowledgements

I am grateful to Ron C. Mittelhammer and Phil Wandschneider for their constant encouragement and suggestions. I would like to thank seminar participants at Washington State University and the University of Arizona. The usual disclaimers apply.

Notes

¹ See Bloom et al . (2001).

² Dasgupta and Weale (1992), Drenowski (1974), Hicks (1979), Kakwani (1993), Morris (1979), Ram (1982), Sen (1973) and Slottje (1991).

³ The model has been later extended to include more than one latent variable.

⁴ For definitions of variables, see Table 1.