Self-Reported Wellbeing Indicators Are a Valuable Complement to Traditional Economic Indicators but Aren’t Yet Ready to Compete With Them

Abstract

We join the call for governments to routinely collect survey-based measures of self-reported wellbeing and for researchers to study them. We list a number of challenges that have to be overcome in order for these measures to eventually achieve a status competitive with traditional economic indicators. We discuss in more detail one of the challenges, comprehensiveness: single-question wellbeing measures do not seem to fully capture what people care about. We briefly review the existing evidence, suggesting that survey respondents, when asked to make real or hypothetical tradeoffs, would not always choose to maximize their predicted response to single-question wellbeing measures. The deviations appear systematic, and persist under conditions where alternative explanations are less plausible. We also review an approach for combining single-question measures into a more comprehensive wellbeing index — an approach that itself is not free of ongoing theoretical and implementational challenges, but that we view as a promising direction.

Keywords: Self-Reported Well-Being, Preference, Indicators, Index, Policy

JEL Classification: C43, C83, D11, I31