Human Needs and the Measurement of Welfare
Wolfgang Fellner and
SRE-Discussion Papers from WU Vienna University of Economics and Business
Adam Smith considered consumption the sole end and purpose of all production. Concerning the measurement of welfare, this requires a sound understanding of the connection between consumption and welfare. The consumerist conceptualization of this connection implies that the amount of consumption equals welfare and the level of production can be an indicator for welfare. The limits and problems of production measures are widely accepted. Yet, indicators like GDP remain the focus of mainstream economic theory and policy. We trace the origin of this lock-in back to the economic model of behaviour and the concept of agency in mainstream economics. The suggested alternative stems from literature about human needs in heterodox economics and psychology. This literature incorporates the relevance of social aspects and cultural change for welfare. It turns out that consumerism can be a threat to well-being and welfare rather than a requirement for it.
Keywords: economic psychology, capabilities approach; self-determination theory; consumerism; structure vs. agency (search for similar items in EconPapers)
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Working Paper: Human Needs and the Measurement of Welfare (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:wiw:wus009:5671
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