Transcript clinch_ferreira

Understanding and Measuring
Quality of Life in Ireland:
Sustainability, Happiness and Well-Being
Professor J. Peter Clinch
Dr Susana Ferreira
Dr Finbarr Brereton
Mirko Moro
Dr Craig Bullock
• Goal of Public Policy is to improve wellbeing in society, and to do so in a
sustainable way
• Problems of definition and measurement:
– How to measure well-being?
– How to measure sustainability?
Economic indicators
• Current public debate informed by
Economic indicators
– At the macro level: Gross National Product
(GNP), Gross Domestic Product (GDP)
– At the micro level: Individual Income
• Are they good indicators of economic and
social progress?
• Last decade, Irish economy grew at a
record rate for a developed country.
• Nevertheless, much concern regarding the
implications of the pace of economic
growth for localized environmental quality
and life satisfaction generally.
• Are people more content?
• Is the economy ‘sustainable’
Problems with Economic indicators
• As indicators of economic progress, they ignore
“non-market” goods and activities:
– Public goods: e.g. environmental quality, social
cohesion.
– Household production
– Value of leisure time
• As indicators of social progress, they ignore
important social aspects:
– Inequality
– Social capital
• At the micro level, does income bring
happiness?
Questions to be addressed:
• If traditional income measures are inadequate
indicators of societal welfare, what new
measures of sustainability and individual and
macro quality of life should be used?
• What do the current results from those
measures tell us?
• What research is required to further develop
such measures so that they can be used as an
evidence-base for policy?
Improving macroeconomic measures of
performance: sustainability measures (1)
• What is sustainability?
– Sustainable development as non-declining
well-being
• How to define well-being?
– Research into the determinants of quality of
life
• How to ensure it is non declining?
– Keeping capital stock constant
Improving macroeconomic measures of
performance: sustainability measures (2)
• Current System of National Accounts
concentrates in physical capital
• Other capital stocks are ignored but must be
included to reflect sustainability (Nobel Laureate,
Robert Solow)
– Human capital
– Social capital
– Natural capital
• Notable exception: World Bank “Genuine
Savings” estimates
Improving macroeconomic measures of
performance: sustainability measures (3)
• “Genuine Savings:” Comprehensive savings
indicator.
It includes adjustments for:
– Depreciation of physical capital
– Depletion of natural resources (timber, fossil fuels,
metals and minerals)
– Environmental degradation (PM10, CO2 emissions)
– Human capital accumulation (Education expenditure)
• Indicator of “weak sustainability”
Savings indicators for Ireland (%GNI)
Gross Savings = GNP – C +
net current transfers
35
Savings as % of GNP
30
‘Genuine’ Savings = ‘Green’
Savings + Education
Expenditure
25
20
Net Savings = Gross
Savings – CFC
15
‘Green’ Savings = Net
Savings - Energy, Mineral
& Forest depletion
10
5
0
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
Green Savings
1994
1993
1992
1991
1990
1989
1988
Net National Savings
1987
1986
1985
1984
1983
1982
1981
1980
1979
1978
1977
1976
1975
1974
1973
1972
1971
Gross National Savings
Ireland Genuine Savings
Improving macroeconomic measures of
performance: sustainability measures (4)
• According to Genuine Savings figures, Ireland is in a
weakly sustainable development path:
• BUT:
– What about strong sustainability?
– Figures favour small countries and economies that consume
imported energy rather than resource based economies
– Irish-specifics problems not taken into account:
•
•
•
•
Emissions of SO2, CO, NOx, NO, NO2, VOC.
Noise/Water pollution
Congestion
Changes in land use
– Adjustments tend to be low common denominator
• Still a long way to go!
Improving quality of life and happiness
measures: the subjective well-being approach (1)
• Economic growth obtains highest priority in
national and international agendas
• What is alternative?
• Psychologists: happiness/subjective well-being
scores
• Economic psychology (e.g. Nobel Laureate:
Daniel Kahneman): how do various factors
(financial, social, environmental) influence wellbeing?
Improving quality of life and happiness
measures: Irish empirical results (1)
• What is explaining this
variation?
• Regression analysis. To
what extent does a
particular factor (e.g. age)
‘explain’ the level of
happiness of an individual
independent of all other
factors (e.g. income)?
• Economic/financial
• Social
• Environmental
Economic/financial determinants of well-being
• Income is significantly related to life satisfaction but only to a point.
• Threshold level of income (a gross household
income of €57,900), after which returns to wellbeing from higher income rapidly diminish
• Employment status: independent of income etc,
unemployment significantly reduces well-being
• Part-time employment for men and lack of
housing tenure also negative
• Living in social housing very negative
Social determinants of well-being
• Young and old are less satisfied with their lives, with a turning point
at 55 years.
• Males are less satisfied with life than females.
• Separated/divorced is negatively associated with life satisfaction
compared to being single.
• No difference between married and single respondents, (possible
explanation is low divorce rate).
• Having 3 or more children is associated with less contentment
• Health: inverse relationship between number of doctor visits and life
satisfaction; self-reported health and life satisfaction are highly
(positively) correlated.
• Married males less satisfied with life than are their married female
counterparts and, indeed, less happy than single males!
• Being a single parent is negatively associated with life satisfaction.
Everything else being equal, reduces life satisfaction by over one
third of a category on the seven point scale.
• But: only in households in which there are no other adults.
Environmental determinants of well-being
Utilised GIS to ‘link’ people to their
surrounding environment:
Proximity to a landfill site is negatively
related to well-being
Living 2km or less from a coast increases
life satisfaction by over ¾ of a category
Access to transport routes is an amenity and
disamenity depending on distance
Why are Dubliners less happy?
• Analysis shows that it is
lower environmental
quality that explains
Dublin’s lower happiness
levels
• After income,
employment status, and
marital status
environmental factors are
the next most significant
determinants of wellbeing
Towards an evidence-base for policymaking
• Ireland’s GDP and GNP have risen dramatically, but this
research shows that money is only one factor that influences
the well-being of society.
• Moreover, monetary measures at the macro level give no
indication of the sustainability of an economy.
• There are alternative measures of progress and success
• Government must invest in research that provides an
evidence-base that allows more sophisticated policymaking in
comparison to the reliance on such traditional monetary
measures including tracking well-being and its determinants
over time
• Principal goal of public policy - to improve the well-being.
Impossible if you do not know the most important factors that
influence the well-being of Irish people?
• Research is required to set priorities for policy - economic,
social and environmental
It‘s not just the economy Stupid!