Measuring National Well-Being - What matters to you?

11 Feb 2011 11:51 AM

In November 2010, the Prime Minister asked the Office for National Statistics (ONS) to, “devise a new way of measuring wellbeing in Britain. The media coverage following the announcement focused on the subjective well-being or ‘happiness’ aspect of the work. Whilst important, asking individuals about how satisfied they are with their lives is only part of ONS’s work on measuring national well-being.


In the post-war developed world, one of the principal concerns of governments has been to ensure economic growth, as measured by Gross Domestic Product (GDP). GDP is the value of the goods and services produced by all sectors of the economy; agriculture, manufacturing, energy, construction, the service sector and government.  Quite simply, if the GDP measure is up on the previous three months, the economy is growing. If it is negative it is contracting. GDP is produced to internationally agreed standards to give an idea of the relative performance of economies. Economists and statisticians, however, have always acknowledged that GDP does not capture everything that determines society’s well-being, and wasn’t designed to do so.
Recognising this, French President Nicolas Sarkozy commissioned a report by a team led by Nobel prize-winning economist Joseph Stiglitz. The Commission on the Measurement of Economic Development and Social Progress concluded that “the time is ripe for our measurement system to shift emphasis from measuring economic production to measuring people’s well-being.”

ONS already produces estimates of the income of households and is improving these measures by including measures of the benefits people receive from public services such as education and health care. Also important for well-being are the goods and services households produce for themselves, such as child-care, gardening, cleaning etc.  These activities are not counted in GDP but do increase the well-being of those who receive them.  For example, when parents look after their child, it is not recorded in GDP, but if the parents pay a childminder to look after their child, it is recorded in GDP. Whilst this might seem to be an accounting technicality, previous estimates by ONS have shown that the value of these activities is around the same size as conventional GDP.People’s economic well-being is determined by their wealth as well as their income. In 2009, ONS published the findings from its first Wealth and Assets Survey which collects information about the assets and liabilities of households and individuals in to estimate household and personal wealth. Also important for assessing national well-being is measuring how income and wealth are distributed across the population.  A society where most of the income and wealth is concentrated in the hands of a small minority of the population is likely to be very different to one in which is income and wealth is more equally distributed.
In recent years, there are has been increasing recognition that financial wealth is not the only national assets; the environment and the skills of its workers are also important determinants of a nation’s future prosperity. Every year since 2002, ONS has published environmental accounts showing data on the environmental impact of economic activity and the use of the environment by the economy.  In 2010, ONS published its first estimates of the human capital stock which showed that the knowledge, skills and talents of the ’s workers was worth more than three times the combined value of all the buildings, machines, vehicles etc in the UK .
However, all this economic data doesn’t paint a full picture of ‘how society is doing’ and there is a need to look at other wider measures to assess national well-being. ONS, through the National Well-being Project, is leading a debate in the about how to best measure the nation’s well-being. This means finding ways to measure more subjective elements, as well as objective measures of the quality of life. We already have a large amount of objective data on a range of subjects including, unemployment, crime, and life expectancy to name but a few. One aspect of the work is to look at how to use and present these measures effectively. Added to this, by asking people about their own views on their own well-being further information will be available to help provide a more complete picture of national well-being.
The national debate has already started, and some of the themes which are already becoming apparent as important to people include job security, relationships with families and health.

Now all of this sounds pretty obvious, but recognising that something is important is only the first step toward actually measuring it. Through the project, ONS will identify the most important areas of concern for people in the UK , and how to go about producing measures that reflect those areas.

Jil Matheson, the UK National Statistician, said:

“We are actively encouraging people to talk about what matters to them and to feed that information back to us in order that we can better understand what the important areas are for measuring national well-being.”
“The more responses we get and the more people talk about what matters to them the more realistic a picture of the we will have.

The debate will run between November 2010 and April 2011, and the findings will help inform the development of the measures that will be used to track the nation's well-being.

People can take part in the debate by visiting ONS website:

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