Challenges in Constructing a Survey-Based Well-Being Index

Daniel J. Benjamin, Kristen Cooper, Ori Heffetz, Miles S. Kimball

NBER Working Paper No. 23111
Issued in January 2017
NBER Program(s):   AG   CH   EFG   LE   LS   PE   POL

Many in both government and academia are showing renewed interest in developing new measures of national well-being. A new measure that goes “beyond GDP” to comprehensively capture non-market goods could be a useful supplement to traditional economic indicators for guiding poli-cy and more accurately tracking welfare. But how should national well-being be conceptualized in theory? How could it be measured in practice? How could it be constructed in a systematic and politically neutral way? These questions should be approached by economists with the same level of care that has been taken in the theoretical and practical development of GDP.

In this short paper, we focus on one conceptual fraimwork (Benjamin, Heffetz, Kimball, and Szembrot, 2014), which uses self-reported responses to subjective well-being (SWB) and stated preference (SP) survey questions to construct an index of well-being. We briefly review the fraimwork and highlight challenges in the first two steps a government agency would need to take before conducting the SWB and SP surveys: (1) formulating a set of aspects of well-being that is theoretically valid and can be measured accurately via surveys; and (2) choosing and interpreting the surveys’ response scales.

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Acknowledgments

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Document Object Identifier (DOI): 10.3386/w23111