measuring and managing multidimensionality: insights from how’s life? and other oecd projects
DESCRIPTION
Measuring and managing multidimensionality: insights from How’s Life? and other OECD projects. Paul Schreyer , Deputy Director of the Statistics Directorate E-Frame Final Conference “GDP and Beyond: Measurement, Policy Use and Moving Forward” 10-11 February 2014, Amsterdam. - PowerPoint PPT PresentationTRANSCRIPT
Measuring and managing multidimensionality: insights from How’s Life? and other OECD projects
Paul Schreyer, Deputy Director of the Statistics Directorate
E-Frame Final Conference “GDP and Beyond: Measurement, Policy Use and Moving Forward”
10-11 February 2014, Amsterdam
Background (1)
• OECD work on well-being started over 10 years ago
• OECD’s measurement of well-being:• Multi-dimensional • Focus on people and households• Focus on outcomes• Objective and subjective aspects • Both averages and inequalities
Background (2) the OECD well-being framework
Background (3) OECD work on well-being: main products
How’s Life? Measuring well-beingA biannual report providing evidence on
well-being (cross-country, over time)
The Better Life IndexAn interactive web application to
disseminate and engage with people on what matters most in
life
• What have we learned from this process?
• And how can we make the link to policy?
Policy use of multi-dimensional frameworks and -measures
1. Tool to inform policy debate (How’s Life?, Better Life Index)
2. Framework for policy design (National approaches)
3. Quantitative tool for policy analysis (Inclusive Growth)
A tool to inform policy debate (ex 1): understanding strengths and
weaknesses20% top performers 60% middle performers 20% bottom performers
Canada
Netherlands
Greece
Tool to inform policy debate (ex 2): assess the full consequence of the Great Recession
GDP does not tell the whole story
Source: OECD National Accounts Database
2007 2008 2009 2010 2011 201290
92
94
96
98
100
102
104
United States
Household disposable income GDP
2007 2008 2009 2010 2011 201290
92
94
96
98
100
102
Household net disposable incme GDP
OECD Euro Area, 2007 = 100
Tool to inform policy debate (ex 3): crisis and subjective well-being
Life satisfaction dropped as unemployment increased
Source: How’s Life? 2013X-axis: Life Satisfaction =average score on a 0-10 scale ; source: OECD calculations on the World Gallup PollY-axis: Long term unemployment rate= % of the labour force unemployed for one year or more; source: OECD Labour Force Statistics
2007 2008 2009 2010 2011 20126.7
6.8
6.9
7.0
7.1
7.2
7.3
7.4
7.5
7.6
0
1
2
3
United States
Life satisfactionLong-term unemployment rate (right hand y-axis)
2007 2008 2009 2010 2011 20125.6
5.8
6.0
6.2
6.4
6.6
6.8
7.0
7.2
7.4
7.6
0
1
2
3
4
5
6
7
OECD Euro area (selected countries)
Life satisfactionLong-term unemployment rate (right hand y-axis)
Tool to inform policy debate (ex 4): The crisis also affected other aspects of life
Trust in governments declined
But new forms of solidarity emerged
2007 2008 2009 2010 2011 201210
15
20
25
30
35
40
45
50
55
OECD OECD Euro areaJPN USA
Percentage of people reporting to trust national government
2007 2008 2009 2010 2011 201280
85
90
95
100
105
110
115
120
OECD OECD Euro area USA
Percentage of people reporting having helped someone, 2007=100
Source: OECD calculations on Gallup World Poll
Lessons (1) Dashboard vs.composite index• Much debate about pros and cons
– Ease of communication– Weights, interpretation of composite
• We may need both– For different audiences– For different purposes:
• How do drivers of WB evolve? Dashboard• How is WB jointly determined by drivers?
Composite• OECD:
– No weights (HiL)– Self-selected weights (BLI)– Estimated weights in Inclusive Growth
(new)•
Lessons (2) The ‘correlation’ argument
‘WB measures show enough correlation with GDP per capita to simply concentrate on the latter’• Only approximately true: much unexplained
variance• Incorrect for particular dimensions (GDP and
obesity)• Correlation says nothing about relationship
GDP – WB: e.g., could higher levels of WB be achieved with different GDP?
• Loses a key policy message: WB should not be a ‘spin-off’ or collateral of growth but the primary policy target
Lessons (3) The ‘happiness confusion’
‘OECD shows that happiest people are in country X’ • distinction between measures of
subjective and objective WB gets lost – its all about ‘happiness’
• Relegation to ‘quality problem’: the ‘real issues’ are elsewhere
• Even harder: getting across distinction between different subjective measures of life evaluation (eg cantril scale) and subjective experience measures (affect)
Well-being as a framework for policy design (Ex 1): The New Zealand Treasury
Framework
• Policy tool developed for front-line policy analysts
• A “manageable list of the key issues that make the most difference”
• Embed the concept of living standards more systematically and more visibly in policy advice to Ministers
Well-being as a framework for policy design (Ex. 2): informing the budgetary process in Israel
Wellbeing indicators as part of the strategy process
Vision and overarching
goalsOptions
Measurement and
evaluationImplemen
tationAnalysis
Detailed planning
and allocation of funds
Emphasis and focus
for the term of office
Wellbeing indicators as analysis and measurement
tool
Well-being as a framework for policy design (Ex 3): New UK vision
Lessons (4) Needed: a policy-integrated framework for well-being
• From ‘accidental’ to systematic checking of consequences of policies on multiple dimensions of well-being
• OECD proposes (E-Frame Handbook) a policy-integrated framework that drives: – Alignment of outcomes across government
agencies and processes – Analysis of policy options and consequences– Accountability of results (next slide)
Joining-up policy at all stages
Strategy developmentIdentify policy goals
PlanningPolicy options identifiedAnalysis of costs and benefits
Implementation and delivery
Evaluation and review
Acco
unta
bilit
yAnalysis
Alignment
Lessons (5)• Whole of government approach for
credibility and to go beyond institutional silos
• A common set of criteria for setting priorities
• Systematic evaluation but also ‘stories’ needed how WB Framework has affected policy design
Sendsteps question here
(”What do we need to do to make multi-dimensional measures to
become a true reference for policy makers?”)
Finally: WB as quantitative tool for policy appraisal
• Example: OECD work on Inclusive Growth• Experimental composite measure of Living
Standards
• Sub-set of WB dimensions:Income Jobs Health
• Adjusted for inequality• Model to link living standards to policies
Overall measure: Living standards
De-composition of living standards of median households 1995-2007
Identifying determinants of components of living standards (e.g. health)
Lessons (6) Quantitative policy appraisal• Need to build up empirical evidence
on interaction between dimensions • Tricky but crucial: estimating
determinants of health, jobs, HH income and their distribution
• Trade-off between capturing complexity and quantification
• But much of the success of WB measures will lie in our capacity to link to policies
THANK YOU!www.oecd.org/howslife
www.oecd.org/measuringprogresswww.oecdbetterlifeindex.org