Archive:This is just the beginning – Insee leads the way in the measurement of well-being
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- Published in Sigma - The Bulletin of European Statistics, 2010/02
Jean-Philippe Cotis, Head of the French Statistical Office, Insee, was a member of the select group of experts behind the Stiglitz Report. In Paris, he spoke to Sigma about measuring the well-being of French society, as well as the work of the Stiglitz Commission.
Introduction
‘The desire to find ways of measuring societal well-being alongside economic growth is not new,’ Mr Cotis said. ‘It is widely agreed that while GDP figures reflect the overall economic output of a country, they tell us nothing about the levels of happiness of its citizens.’
Neglected housework
Mr Cotis said that weaknesses in current statistical accounting, which had to be urgently addressed, included, for instance, housework. ‘When you are not working professionally and instead raising your children, your daily ’output’, or housework, is not measured at the moment,’ he explained. ‘Giving your children music lessons or art classes after school can be considered as educational work. Equally, more ’domestic’ activities, such as ironing shirts or hoovering your flat, should also be measured statistically, the logic being that someone else could be hired by you to do this work for money. If you paid them for their services, you would be increasing your country’s GDP. This needs to be noted.’
In addition, Mr Cotis observed: ‘If we look at the way education systems function in different settings, we soon realise that often the same type of schooling is public in Europe, and private, meaning that it has to be paid for, in the US. If the education sector in the US makes money, it means that it can be listed as contributing extra value added to the US GDP, whereas in Europe this is not the case. This demonstrates present difficulties in measuring GDP in various countries.’
Pioneering work
In order to fill these gaps, Insee started analysing the composition of the disposable income of French households two years ago. It designed an evaluation system based on the framework of national accounts. ‘We broke households down into five income groups by the so-called quintiles, according to their gross income,’ Mr Cotis explained. ‘Each quintile represents 20% or one fifth of all households. This system helped us to better understand their consumption and income patterns. What we saw were marked differences in the spending and saving behaviour of the French people.’
Mr Cotis continued: ‘When you are poor, your whole income is extremely important to you, every euro counts. However, when you make 10 000 euros a month, a single euro hardly matters. This mechanism holds for a society as a whole as well: past a certain level of GDP per capita, levels of happiness are increasing less and less markedly. Affluent Western societies may rate lower in some polls than poorer counterparts elsewhere in the world.’
Mr Cotis said that Insee would further expand its consumer surveys in the future to include new themes, such as the use of time at home and the levels of contentment with different leisure activities. ‘The shift in the way we produce statistics should also entail better measurement of people’s levels of satisfaction and the way they spend their time,’ he explained.
According to Mr Cotis, measuring subjective well-being is not easy, but first attempts were proving that it could be done. People are able to rate various experiences according to satisfaction derived from them.
Stiglitz work brings new impetus
Referring to his involvement in the work of the Stiglitz Commission, Mr Cotis said that Insee’s ground-breaking experience in the field of social statistics prepared him well for his participation in the Stiglitz group.
He said: ‘Many of the issues discussed by the Commission were not brand new. The real importance of our work lay in the fact that top international scientists and experts got together to systematise the existing knowledge in the field, identify new opportunities and draw useful conclusions. We did not try to re-invent the wheel. All we set out to do was to offer fresh insights into the way international statistics operate today and suggest a more structured approach in addressing mounting challenges for statisticians.’
Mr Cotis said that the Commission did not seek ways to replace GDP figures, only to complement them with an array of new indicators. ‘Everyone agreed that mere measurement of raw economic growth is not enough any more; that we need to rely on a new set of indicators taking into account social well-being. Our final Report recommends that GDP should be used to measure economic activity and that it should be combined with data allowing for well-being factors such as environmental health, safety and education,’ he explained.
More to come
‘This is just the beginning. In the future, statistics will include the measurements of inequality between genders, as well as age and social groups. Our data will allow policymakers to evaluate levels of well-being in their societies and make plans to act accordingly,’ said Mr Cotis.
Concluding, Mr Cotis pointed to another positive aspect of the Commission’s work. He said that the fact that statisticians were now dealing with an expanded range of social issues might help dispel the degree of mistrust among certain segments of European societies. ‘Polls show that there are many people out there who do not trust official statistics, whose perception is that we do not measure things that really matter or that our figures are somehow being manipulated. By addressing concrete issues closer to the heart of an average citizen, we will be fighting this erroneous perception as well,’ he said.
Further Eurostat information
Publications
- SIGMA - The Bulletin of European Statistics, 02/2010: GDP & Beyond; Focus on measuring economic development and well-being
- Sustainable development in the European Union - 2009 monitoring report of the EU sustainable development strategy
Database
- Indicators
Dedicated section
Other information
- GDP and Beyond: Measuring progress in a changing world (Commission Communication COM final 433/2009)