chapter 3 Looking at Well-being Data in Context
Objective lists of well-being involve a list of assumptions regarding basic human needs, rights and conditions that are believed to impact on well-being. A simplified example is the Human Development Index (HDI), which is a composite index of three separate indicators: life expectancy, education and gross national income per capita. A composite index means a single number is calculated from these three indicators to make the data easier to use and visualise. This enables the HDI to rank countries into ‘tiers of human development’ . The key aspect of the HDI’s design is its simplicity. Rather than intending to capture all aspects of well-being, the idea is that it is simplified and made easy for a broad audience to read and understand.
The use of indices like the HDI to understand international development has been criticised. One source of criticism is that the dimensions that contribute to these indices are those things that are considered important in the richer countries in the global North, rather than those things that are considered important in the countries where these indices are being used. Another source of criticism is to do with what happens when these dimensions are combined. In the case of the HDI, the three dimensions are treated equally: for example, the income dimension is treated as holding the same importance as the two social dimensions (education and life expectancy). This assumes that all human beings value the three dimensions equally . However, this is not always the case and the representations of these various ‘achievements’ are sometimes criticised as being arbitrary, subjective or depending on a priori value judgements . In particular, because wealthier countries will always appear higher up the scale as a consequence of the importance placed on income.
Box 3.2 A Composite Index
A more familiar type of index might be from hearing or seeing things about the stock market on the news. The Dow Jones Industrial Average is a composite index. Ordinarily called the Dow or the Dow Jones, the index is made up of financial data from 30 large companies listed on US stock exchanges. Composite indexes are used to conduct investment analyses, measure economic trends, and forecast market activity in a way that is easy to read. ‘The Dow’ is criticised because it only includes 30 companies, as it was designed in the 1880s to represent the main markets at the time. Markets are, of course, now more complex. It is also criticised because it is weighted by price, when other indexes use alternative weights that capture more of the intricacy of the market.
As you can see, there is even methodological disagreement on how to best represent stock market data so they capture the most important aspects of the market (change) while remaining understandable. Interestingly, both in spite of and because of its age, the Dow is still the most used.
The objective list approach (or establishing a list of objective indicators) is mainly used by national and international statistics offices, with the aim of generating a complete list of what is necessary to satisfy a good life or ensure a good society. The OECD and ONS examples of well-being indexes are more comprehensive examples of these lists and have closer to 50 indicators (rather than the HDI’s three).
- Human Development Reports 2020; United Nations n.d.
- The HDI has received critique (Kovacevic 2010) as has the use of any index in developing contexts. For example, anthropologically-informed well-being research tends to focus on how policy approaches overlook the specificities of culture: people, places and their histories (White 2006). Non-Euro-centric practices, which may be culturally different, are often categorised as deficient in some way: either bad for well-being or inefficient (Gough 2004). Work in this field extends that of Critical Development Studies, which state that imposing the agenda of the global north elsewhere is problematic (White 2015, 5).
- United Nations 2020
- OECD 2011b