Mind the Gap: Identifying Latent Objective and Subjective Multi-dimensional Indices of Well-Being

Luisa Corrado and Giuseppe De Michele ()

No 386, CEIS Research Paper from Tor Vergata University, CEIS

Abstract: Within the OECD Better Life Initiative, the Better Life Index (BLI) represents a major attempt to measure well-being and societal progress beyond GDP, following up the recommendations outlined in the Stiglitz-Sen-Fitoussi Commission report. Using a Structural Equation Modeling (SEM) approach, we estimate BLI as a latent construct starting from eleven underlying dimensions of well-being. This method, based on variance-covariance matrices, allow us to study the interrelations and causal relationships across well-being determinants and across the underlying drivers of well-being. In our analysis we utilize two di¤erent comparable OECD datasets for the year 2012, one based on average country-level data re?ecting well-being outcomes, the other one on microdata re?ecting people?s stated preferences on well-being indicators. In order to deal with the idiosyncratic structures of the datasets, we apply two Structural Equation Modeling techniques ?bootstrapped SEM and Generalised SEM MIMIC-to estimate the relative weights and rankings of BLI dimensions. We then build an 'objective' BLI measure predicted from the national-level data, whereas a ?subjective? BLI is obtained using the new OECD microdata. Finally, we conclude our analysis comparing the objective and subjective BLI dimensions weights and country rankings and discussing the main policy implications.

Keywords: Structural Equation Modeling; Latent Multidimensional Index; Beyond GDP; SubjectiveWell-Being Index; ObjectiveWell-Being Index; Stated Preference; Generalised SEM MIMIC; GSEM; Bootstrapped SEM; Small Sample Size; Weights. (search for similar items in EconPapers)
JEL-codes: C43 C83 D12 I31 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2016-06-24, Revised 2016-06-24
New Economics Papers: this item is included in nep-dcm, nep-hap and nep-ltv
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://ceistorvergata.it/RePEc/rpaper/RP386.pdf Main text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rtv:ceisrp:386

Ordering information: This working paper can be ordered from
CEIS - Centre for Economic and International Studies - Faculty of Economics - University of Rome "Tor Vergata" - Via Columbia, 2 00133 Roma
https://ceistorvergata.it

Access Statistics for this paper

More papers in CEIS Research Paper from Tor Vergata University, CEIS CEIS - Centre for Economic and International Studies - Faculty of Economics - University of Rome "Tor Vergata" - Via Columbia, 2 00133 Roma. Contact information at EDIRC.
Bibliographic data for series maintained by Barbara Piazzi ().