A Comparative Analysis of Four Different Well-Being Measures and Their Policy Implications

The Case of Bhutan

Abstract

Due to the imperfection of Gross Domestic Product (GDP) as a well-being measure, which has recently been widely acknowledged, many alternative measures were proposed and eventually used to measure the holistic progress in several countries. The purpose of this study is to provide a comparative analysis of the four advanced well-being measures, including, Per Capita Expenditure, Composite Well-being Index, Gross National Happiness Index, and Subjective Well-being Index. Study uses Bhutan Living Standard Survey data 2017 and calculated multidimensional indices, Composite Well-being Index and Gross National Happiness Index, using fourteen significant variables. Per Capita Expenditure and Subjective Well-being Index are calculated using consumption expenditure variables and subject well-being variables available in the survey data respectively. For comparison, the study applies the four measures to the whole sample and then to the bottom group of the sample. Study finds that: (i) Gross National Happiness Index and Composite Wellbeing Index are relatively closer, whereas (ii) there is a sizable difference in the people classified in the bottom decile and quartile by the four measures. In particular, less than 1 percent of the sample population belongs to the bottom decile according to all the measures.