Understanding and Measuring Quality of Life in Ireland:

Sustainability, Happiness and Well-Being

Professor J. Peter ClinchDr Susana FerreiraDr Finbarr Brereton

Mirko MoroDr Craig Bullock

• Goal of Public Policy is to improve well-being 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)

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Gross National Savings Net National Savings Green Savings Ireland Genuine Savings

Gross Savings = GNP – C + net current transfers

‘Green’ Savings = Net Savings - Energy, Mineral & Forest depletion

Net Savings = Gross Savings – CFC

‘Genuine’ Savings = ‘Green’ Savings + Education Expenditure

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 well-being?

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

• 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 well-being 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

Economic/financial 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.

Social 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

Environmental determinants of well-being

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 well-being

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!