What matters for population well being? GDP or Gini? Jl of happiness studies. July.2014

23.07.2014

What factors decide/ influence/ define that a society a ‘better’ one ? Economists argue that GDP is a good measure of well-being of a population.over the many years, social scientists have expanded the idea of wellbeing to include satisfaction with career, social interactions, financial status, physical health, life evaluation, emotional health, work environment, access to basic needs.. to mention a few. Rawl’s theory ( justice) focus on the redistribution of wealth to equalize access of opportunities and provision of public/social goods. The fact that countries with progressive income taxes measure better on wellbeing is very much supportive of this theory.

US, richest country in the world, is well behind in terms of wellbeing. Many studies using US data, have confirmed that it is relative wealth/ income that is more important ( than absolute ) and income disparity with in a community is excessively corrosive for wellbeing of the whole community.

Vivian Grace Valdmanis of the Health Policy and Public Health at Philadelphia analysed well-being in each of the fifty states in the US using a mixed panel model approach (2009–2011) including typical economic and political measures.

Results:

1. Well-being is positively and statistically significantly correlated with the Gini coefficient i.e. the more the income inequality in a state, less well-being it has.

2. The more politically conservative a state is, less is the well-being.
3. Per capita income itself did not explain the well-being differences. it is likely that post 2008 economic state might have unduly influenced this. However Gini index was a sensitive measure explaining wellbeing.

This is not a new finding. Inequality with in a society has harmful effects on population well-being. Political conservatism also limits wellbeing of the population.

Comment: In countries where all focus is on economic growth ( i.e. GDP), neglecting “Gini” could have serious and long-lasting negative consequences.

Summary of the article

Vivian Grace Valdmanis.Factors Affecting Well-Being at the State Level in the United States.J Happiness Stud. DOI 10.1007/s10902-014-9545-0

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