A new GLO Discussion Paper does not support the conjecture that economic efficiency promotes well-being.
GLO Discussion Paper No. 1061, 2022
A measure of well-being efficiency based on the World Happiness Report – Download PDF
by Sarracino, Francesco & O’Connor, Kelsey J.
Author Abstract: We propose a measure of well-being efficiency to assess countries’ ability to transform inputs into subjective well-being (Cantril ladder). We use the six inputs (real GDP per capita, healthy life expectancy, social support, freedom of choice, absence of corruption, and generosity) identified in the World Happiness Reports and apply Data Envelopment Analysis to a sample of 126 countries. Efficiency scores reveal that high ranking subjective well-being countries, such as the Nordics, are not strictly the most efficient ones. Also, the scores are uncorrelated with economic efficiency. This means that the implicit assumption that economic efficiency promotes well-being is not supported. Well-being efficiency can be improved by changing the amount (scale) or composition of inputs and their use (technical efficiency). For instance countries with lower unemployment, and greater healthy life expectancy and optimism are more efficient.
Featured image: Elijah-Hail-on-Unsplash
GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS, EconPapers). Complete list of all GLO DPs – downloadable for free.
The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.