An Introduction to Wellbeing Economics

Wellbeing economics is a branch of economics that places greater emphasis on measuring and promoting the overall well-being of individuals and society, rather than just focusing on economic growth and the accumulation of wealth. It involves taking into account factors such as physical and mental health, social connections, meaningful work, and environmental sustainability, in addition to traditional economic indicators like GDP. The goal of wellbeing economics is to create policies and systems that promote the long-term well-being of all members of society, rather than just a select few.

Some of the key principles of wellbeing economics include:

  • Recognizing that economic growth and wellbeing are not the same thing, and that economic growth can sometimes come at the expense of wellbeing
  • Incorporating a broader range of factors that contribute to wellbeing, such as health, education, social connections, and environmental quality
  • Prioritizing long-term sustainable outcomes over short-term gains
  • Emphasizing the importance of equity and inclusion in economic decision-making

Wellbeing economics focuses on 7 types of capital stock (Dalziel et al., 2018), listed in the following figure:


In recent years, there has been a growing interest in measuring wellbeing. One example of a multidimensional system of wellbeing indicators is the Equitable and Sustainable Well-Being Index (BES), which currently serves as the benchmark for the annual quality of life evaluation in Italy (Facchinetti and Siletti, 2022). The BES takes into account various aspects, such as health, education, security, economic wellbeing, subjective wellbeing, social relationships, work-life balance, and the environment, to provide a comprehensive picture of the wellbeing of a society. Below, we will use the environment and social relationships as examples to illustrate how the BES framework measures wellbeing through various indicators.






References:

Dalziel, P., Saunders, C., Saunders, J. (2018). From Economic Growth to Wellbeing Economics. In: Wellbeing Economics. Wellbeing in Politics and Policy. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-93194-4_1

Facchinetti, S., Siletti, E. (2022). Well-being Indicators: A Review and Comparison in the Context of Italy. Social Indicators Research 159, 523–547. https://doi.org/10.1007/s11205-021-02761-0

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