Mismeasuring Our Lives

Much progress has been achieved in the last two decades in terms of measuring environmental conditions (through better environmental data, the regular monitoring of indicators and accounting tools), understanding their impacts (e.g., evaluation of related morbidity and mortality, labor productivity, the economic stakes associated with climate change, biodiversity change, damage from disasters) and establishing a right of access to environmental information. A range of environmental indicators can be used to measure human pressure on the environment, the responses from administrations, firms and households to environmental degradation and the actual state of environmental quality.

Research on social connections has traditionally relied on proxy measures, such as the number of individual memberships in associations, or the frequency of activities assumed to result from social connections (e.g., altruistic behavior and voter turn-out). However, it is by now accepted that these are not good measures of social connections, and that reliable measures require surveys of peoples’ behaviors and activities. In recent years, a number of statistical offices (in the United Kingdom, Australia, Canada, Ireland, the Netherlands and, most recently, the United States) have started surveys that measure various forms of social connections. For example, special modules of the labor-force survey in the United States ask people about their civic and political engagement, their membership and voluntary work in various organizations, their relationship with neighbors and family members and how they get information and news. Similar surveys should be implemented elsewhere, based on questions and protocols that allow valid comparisons across countries and over time. Progress should also be made in measuring additional dimensions of social connections (such as trust in others, social isolation, availability of informal support in case of need, engagement in the workplace and in religious activities, friendship across lines of race, religion and social class) by building on the experience accumulated by some countries in these fields.

Comparisons based on existing indicators of political voice and governance highlight vast differences between countries, especially between those with a long history of democratic functioning and those that have moved from authoritarian to democratic regimes only more recently and that have not yet established the full range of freedoms and rights. Even in the developed world, however, low trust in public institutions and declining political participation point to a growing gap between how citizens and political elites perceive the functioning of democratic institutions

Political voice is an integral dimension of the quality of life. Intrinsically, the ability to participate as full citizens, to have a say in the framing of policies, to dissent without fear and to speak up against what one perceives to be wrong are essential freedoms. Instrumentally, political voice can provide a corrective to public policy: it can ensure the accountability of officials and public institutions, reveal what people need and value and call attention to significant deprivations. Political voice also reduces the potential for conflicts and enhances the prospect of building consensus on key issues, with pay-offs for economic efficiency, social equity and inclusiveness in public life.

These arguments by themselves are sufficient to suggest that resources are an insufficient metric for quality of life. Which other metric should be used instead for assessing quality of life depends on the philosophical perspective taken.
While a long tradition of philosophical thought has addressed the issues of what gives life its quality, recent advances in research have led to measures that are both new and credible. This research suggests that the need to move beyond measures of economic resources is not limited to developing countries (the traditional focus of much work on “human development” in the past) but is even more salient for rich industrialized countries

However, it would be a mistake if, as a result of these measures, we were to conclude that living standards have fallen when leisure time (and environmental quality) has increased. As society progresses, it is not unreasonable to expect people to enjoy some of the fruits of that progress in the form of leisure. Different societies may respond differently to higher living standards, and we do not want to bias our judgments (e.g., of success) against societies that choose to enjoy more leisure.

Improving the volume measures of outputs does not dispense with the need to improve—and publish—the volume measures of inputs. Only if both the outputs and inputs of service production are well captured will it be possible to estimate productivity change and undertake productivity comparisons across countries.

Exploiting new administrative data sources is one way of making progress in this direction. Ideally, the information would also capture service quality, for instance, the way patients are accommodated in hospitals or the time devoted to them by the medical staff, though such data may be hard to collect. In this case, new primary data sources such as surveys may be necessary

Take the following example: the United States spends more per capita on health care than many European countries, yet in terms of standard health indicators, outcomes are worse. Does this mean that Americans receive less health care? Or does it mean their health care is more expensive and/or delivered less efficiently? Or does it mean that health outcomes also depend on factors specific to American society other than health expenditure? We need to break down the change in health expenditure into a price and an output effect. But what exactly are the volumes of output that one is looking for? It

The debate in Europe has tended to go the opposite way: official price statistics have been criticized for underestimating inflation. This has been partly because people’s perception of inflation differs from the national averages presented in the consumer price index, and also because it is felt that statisticians overadjust for quality improvements in products, thereby painting too rosy a picture of citizens’ real income.