Measuring Well-being and Societal Progress - Beyond GDP

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Chart 5. Average annual growth rate of GDP adjusted for leisure time of workers, 1970-20030 1 2 3 4 5AUSAUTBELCANDNKFINGDP per capitaGDP and leisure valued at 1/2 ofhourly compensationGDP w ith leisure valued at hourlycompensationGDP w ith leisure valued at hourlyGDPFRADEUGRCHUNIRLITAJPNMEXNLDNZLNORPOLPRTSVKESPSWEGBRUSAOECD-24Note: The quantity of leisure time of workers is estimated by deducting from the time-endowment of each worker a(common) estimate of the time devoted to personal care and unpaid activities and (country-specific) estimates ofannual working hours per worker. Leisure time is valued using three different prices: hourly compensation ofemployees; half of hourly compensation; and GDP per hour worked. While the time period considered extends from1970 to 2003 for most countries, it is shorter for some (Austria, Czech Republic, Germany, Greece, Hungary, Korea,Luxembourg, Mexico, New Zealand, Portugal and Slovak Republic. For further details, see Boarini et al. (2006).Source: OECD Productivity database and annual national accounts.1.3.2. Well-being and household sizeEstimates of per capita household income in the national accounts are obtained by summing upincome across all households and dividing the total among the resident population. This approach does nottake into account any variation in household size. In fact, households of different sizes have differentabilities to pool resources and do not need the same income to assure the same level of well-being for their12
members. For instance, a household consisting of a couple with two children does not necessarily needtwice the income of a childless couple to achieve the same level of well-being. One way this factor can betaken into account is by applying a common “equivalence scale” to survey data on household income tocalculate what is called the “equivalised household disposable income” of each person.Equivalence scales are computation devices, and there is little empirical consensus on their “true”value; they may also vary from country to country as well as over time. While the levels of equivaliseddisposable income are therefore not especially informative – estimates show that, as might be expected,equivalised household disposable income exceeds the non-equivalised measure, which assumes thateveryone lives alone, and that the difference is greater in countries where the average household size islarger – changes in equivalised disposable income over time show that the general trend towards smallerfamily sizes has reduced economies of scale and well-being in all countries, sometimes by a considerablemargin (e.g. Italy and Mexico, Chart 6).Chart 6. Real annual change of per capita household disposable income and adjustments for changes inhousehold size, 1995 to early 2000s-1 0 1 2 3 4 5AUSCANCZEDNKFINFRADEUGRCHUNITAJPNMEXNLDNZLNORPOLPRTESPSWETURGBRUSAIncome per capitaIncome adjusted for household sizeOECD-22Note: Survey data on household disposable income refer to discrete years (in the mid-1980s, mid-1990s and early 2000s) that maydiffer across countries. To allow comparisons between the years shown, these data have been interpolated between availableobservations and (when necessary) extrapolated to 2002. Data on the average size of private households (as available through thesesurveys) have been applied to the national accounts “aggregate" measure of household disposable income (to avoid thecomparability problem of differences in survey- and national account-based measures of household disposable income).Source: Calculation based on OECD national accounts and OECD questionnaire on income distribution and poverty.13
Page 4: 16 indicators described above into
Page 8 and 9: Chart 3. Gross domestic product, gr
Page 10 and 11: Chart 4. Real household disposable
Page 15 and 16: Chart 7. Real annual change in hous
Page 17 and 18: • Across time, the coexistence of
Page 19 and 20: Norwegian Ministry of Finance and t
Page 21 and 22: • The use of subjective measures
Page 23 and 24: will be assessed by individual citi
Page 25 and 26: REFERENCESAbraham, K.G. and C. Mack

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