Wednesday, January 19, 2005

143. Quality-of-life Index

This study first came to my attention through an article on the BBC website last November. I was mildly surprised but not particularly gobsmacked to find Ireland so high on the table. Yesterday I tracked down the original article in the Economist containing a rationale for the scoring system; some of the highlights are included in the summary below:

The Economist Intelligence Unit has developed a new
“quality of life” index based on a unique methodology
that links the results of subjective life-satisfaction
surveys to the objective determinants of quality of life
across countries. The index has been calculated for 111
countries for 2005.

Quality-of-life indices
It has long been accepted that material wellbeing, as
measured by gdp per person, cannot alone explain the
broader quality of life in a country。The values of the
life-satisfaction scores that are predicted by our nine
indicators represent a country’s quality-of-life index,
or the “corrected” life-satisfaction scores, based on
objective cross-country determinants.

Some countries are rich... Posted by Hello

Determinants of quality of life
The nine quality-of-life factors, and the indicators used
to represent these factors, are

1. Material wellbeing
gdp per person, at ppp - purchasing-power parity - in $.
Source: Economist Intelligence Unit
2. Health
Life expectancy at birth, years. Source: us Census Bureau
3. Political stability and security
Political stability and security ratings. Source: Economist
Intelligence Unit
4. Family life
Divorce rate (per 1,000 population), converted into index
of 1 (lowest divorce rates) to 5 (highest). Sources: un; Euromonitor
5. Community life
Dummy variable taking value 1 if country has either high
rate of church attendance or trade-union membership; zero
otherwise. Sources: ilo; World Values Survey
6. Climate and geography
Latitude, to distinguish between warmer and colder climes.
Source: cia World Factbook
7. Job security
Unemployment rate, %. Sources: Economist Intelligence
Unit; ilo.
8. Political freedom
Average of indices of political and civil liberties. Scale of 1
(completely free) to 7 (unfree). Source: Freedom House
9. Gender equality
Ratio of average male and female earnings, latest available
data. Source: undp Human Development Report

A number of other variables were also investigated but,
in line with findings in the literature, had no impact in
this multivariate framework. These were: education levels,
the rate of real gdp growth and income inequality
(Gini coefficient). Studies have often found at most a
small correlation between education and life satisfaction,
over and above any impact that education has on
incomes and health, and possibly other variables such
as the extent of political freedom. A recent report by the
ilo found that an indicator of schooling and training
was actually inversely related to wellbeing when jobs are
poorly attuned to people’s needs and aspirations.

...others are not… Posted by Hello

Regression statistics
Over several decades there has been only
a very modest upward trend in average life-satisfaction
scores in developed nations, whereas average income has
grown substantially.

The explanation is that there are factors associated
with modernisation that, in part, offset its positive impact.
A concomitant breakdown of traditional institutions
is manifested in the decline of religiosity and of
trade unions; a marked rise in various social pathologies
(crime, and drug and alcohol addiction); a decline in
political participation and of trust in public authority;
and the erosion of the institutions of family and marriage.
In personal terms, this has also been manifested
in increased general uncertainty and an obsession with
personal risk. These phenomena have accompanied
rising incomes and expanded individual choice (both
of which are highly valued). However, stable family life
and community are also highly valued and these have
undergone a severe erosion.

Accounting for difference
When one understands the interplay of modernity
and tradition in determining life satisfaction, it is then
easy to see why Ireland ranks a convincing first in the
international quality-of-life league table. It successfully
combines the most desirable elements of the new—material
wellbeing, low unemployment rates, political
liberties—with the preservation of certain life satisfaction-
enhancing, or modernity-cushioning, elements of
the old, such as stable family life and the avoidance of
the breakdown of community. Its score on all of these
factors are above the eu-15 average, (7.504), easily offsetting
its slightly lower scores on health, climate and gender

...and some have come a long way Posted by Hello

The United Kingdom, by contrast, ranks 29th in
the world—well below its rank on income per person
and bottom among the eu-15 countries (6.917). Social and
family breakdown is high, offsetting the impact of high
incomes and low unemployment. Its performance on
health, civil liberties, and political stability and security
is also below the eu-15 average. The United States (7.615) ranks
lower on quality of life than on income but it is above
the eu-15 average. Italy (7.810) performs well, but Germany (7.048)
and France (7.084) do not—belying the notion that the big eurozone
nations compensate for their productivity lag with
a better quality of life than in America.

Click here to read the full text of the article, plus the chart listing all 111 countries in the survey.