12 May 2015
Over the last decade, there has been a renewed interest in measuring subjective wellbeing, in terms of happiness or, more precisely, life satisfaction, as a complement to GDP. We have seen this with the World Happiness Report and the United Kingdom Office of National Statistics’ happiness measurement project. There is also interest in using life satisfaction as a policy tool. The UK Commission on Wellbeing and Policy, for example, has explored how wellbeing analysis can be applied in various aspects of health and social policy. Subjective wellbeing is different from actual social progress and is less clearly actionable. But the two can be complementary and inform each other. This section explores the relationship between subjective wellbeing and social progress, and its implications.
We begin by looking at the overall relationship between social progress and life satisfaction. We know that both are correlated with GDP per capita so it is not surprising that, as Figure 5.7 shows, social progress is highly correlated with life satisfaction. But, the relationship is more robust than this: after controlling for GDP, there is a statistically and quantitatively significant impact of the Social Progress Index on life satisfaction.
However, it is important to note that the relationship between subjective wellbeing and the Social Progress Index is complex. We have undertaken preliminary analysis of the relationship between subjective wellbeing and each dimension of the 2015 Index. Once one controls for GDP, there is no separate impact of the Basic Human Needs or Foundations of Wellbeing dimensions on subjective wellbeing; there is, however, a quite robust and independent impact of Opportunity on life satisfaction. To put this in perspective, it is useful to compare Russia and Mexico. Russia has a significantly higher GDP per capita than Mexico ($23,564 vs $16,291) and both countries score similarly on Basic Human Needs and Foundations of Wellbeing. Yet they diverge on Opportunity (Russia 49.19; Mexico 60.88). On self-reported life satisfaction, Mexico scores 7.03 on a ten-point scale, compared to 5.59 in Russia.
In part, this result is reflecting the interplay between the Social Progress Index and GDP per capita: GDP per capita is correlated with Basic Human Needs and Foundations of Wellbeing, but has only a noisy relationship with Opportunity. This finding raises a more fundamental point: exclusive attention to economic indicators as a means for raising subjective wellbeing has the consequence of distracting attention from aspects of social performance such as Tolerance and Inclusion or Personal Rights which are more loosely linked to traditional measures of economic development.
For countries like the United Kingdom and others, which are looking to measure and evaluate policies in terms of life satisfaction, this finding identifies interventions beyond simply increasing prosperity that are likely to have a positive impact, including rights, freedom of choice, social attitudes towards tolerance, and higher education.
Even for countries that are not deliberately pursuing life satisfaction, the relationship between Opportunity and life satisfaction may be important. It is notable that the countries that experienced the Arab Spring tend to underperform on Opportunity. If life satisfaction is linked to social discontent and civil unrest, countries may wish to mitigate risks of disorder through policies that improve Opportunity and enhance life satisfaction. For businesses too, Opportunity measures may therefore be a useful measure of potential social and political risk. This will require further investigation of the relationship to understand whether Opportunity may be a leading indicator of political instability or the rise of social movements.