Human Well-being and Economic Well-being: What Values Are Implicit in Current Indices?

Abstract

This paper develops an Index of Economic Well-being (IEWB) for the United States, the United Kingdom, Canada, Australia, Germany, Norway and Sweden for the period 1980 to 2001 which recognizes four components: Current effective per capita consumption flows; Net societal accumulation of stocks of productive resources; Income distribution; Economic security.

Since the Human Development Index uses GDP per capita to measure “command over resources”, which implicitly makes the strong value judgment that inequality and insecurity do not matter, the paper demonstrates that a better measure of “command over resources” has a significant effect on the trend and level of the HDI – particularly for the United States, which slips to last place among the countries examined.

Download full PDF article