Does Money Buy Me Love? Testing Alternative Measures of National Wellbeing

Arthur Grimes, Les Oxley and Nicholas Tarrant ()

No 12_09, Working Papers from Motu Economic and Public Policy Research

Abstract: Many aggregate measures of wellbeing and sustainability exist to guide policy-makers. However, the power of these aggregate measures to predict objective wellbeing outcomes has received little comparative testing. We compile and compare a range of aggregate wellbeing measures including: material measures (e.g. Gross Domestic Product per capita), surveyed measures (e.g. life satisfaction) and composite measures (e.g. Human Development Index) covering a range of countries. We test the predictive power of wellbeing measures for an objective indicator of how people value countries’ relative attractiveness. The objective indicator is net migration over a fifty year timespan, indicating people’s revealed preference (re)location choices. The paper examines relationships amongst cross-country wellbeing and sustainability measures; and examines how New Zealand compares with other countries according to these measures. Based on models of spatial (dis)equilibrium and migration, we present tests of the predictive power of alternative aggregate measures for international migration outcomes. We find that both material and life satisfaction outcomes are important determinants of the choice to migrate.

Keywords: aggregate wellbeing; life satisfaction; gross domestic product; migration (search for similar items in EconPapers)
JEL-codes: A13 E01 J61 R23 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2012-08
New Economics Papers: this item is included in nep-hap and nep-mig
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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