Understanding and Measuring Quality of Life in Ireland: Sustainability, Happiness and Well-Being Professor J. Peter Clinch Dr Susana Ferreira Dr Finbarr Brereton Mirko Moro Dr Craig Bullock

Goal of Public Policy is to improve well- being in society, and to do so in a sustainable way Problems of definition and measurement: –How to measure well-being? –How to measure sustainability?

Economic indicators Current public debate informed by Economic indicators –At the macro level: Gross National Product (GNP), Gross Domestic Product (GDP) –At the micro level: Individual Income Are they good indicators of economic and social progress?

Last decade, Irish economy grew at a record rate for a developed country. Nevertheless, much concern regarding the implications of the pace of economic growth for localized environmental quality and life satisfaction generally. Are people more content? Is the economy ‘sustainable’

Problems with Economic indicators As indicators of economic progress, they ignore “non-market” goods and activities: –Public goods: e.g. environmental quality, social cohesion. –Household production –Value of leisure time As indicators of social progress, they ignore important social aspects: –Inequality –Social capital At the micro level, does income bring happiness?

Questions to be addressed: If traditional income measures are inadequate indicators of societal welfare, what new measures of sustainability and individual and macro quality of life should be used? What do the current results from those measures tell us? What research is required to further develop such measures so that they can be used as an evidence-base for policy?

Improving macroeconomic measures of performance: sustainability measures (1) What is sustainability? –Sustainable development as non-declining well-being How to define well-being? –Research into the determinants of quality of life How to ensure it is non declining? –Keeping capital stock constant

Improving macroeconomic measures of performance: sustainability measures (2) Current System of National Accounts concentrates in physical capital Other capital stocks are ignored but must be included to reflect sustainability (Nobel Laureate, Robert Solow) –Human capital –Social capital –Natural capital Notable exception: World Bank “Genuine Savings” estimates

Improving macroeconomic measures of performance: sustainability measures (3) “Genuine Savings:” Comprehensive savings indicator. It includes adjustments for: –Depreciation of physical capital –Depletion of natural resources (timber, fossil fuels, metals and minerals) –Environmental degradation (PM10, CO 2 emissions) –Human capital accumulation (Education expenditure) Indicator of “weak sustainability”

Savings indicators for Ireland (%GNI) Gross Savings = GNP – C + net current transfers ‘Green’ Savings = Net Savings - Energy, Mineral & Forest depletion Net Savings = Gross Savings – CFC ‘Genuine’ Savings = ‘Green’ Savings + Education Expenditure

Improving macroeconomic measures of performance: sustainability measures (4) According to Genuine Savings figures, Ireland is in a weakly sustainable development path: BUT: –What about strong sustainability? –Figures favour small countries and economies that consume imported energy rather than resource based economies –Irish-specifics problems not taken into account: Emissions of SO 2, CO, NO x, NO, NO 2, VOC. Noise/Water pollution Congestion Changes in land use –Adjustments tend to be low common denominator Still a long way to go!

Improving quality of life and happiness measures: the subjective well-being approach (1) Economic growth obtains highest priority in national and international agendas What is alternative? Psychologists: happiness/subjective well-being scores Economic psychology (e.g. Nobel Laureate: Daniel Kahneman): how do various factors (financial, social, environmental) influence well- being?

Improving quality of life and happiness measures: Irish empirical results (1) What is explaining this variation? Regression analysis. To what extent does a particular factor (e.g. age) ‘explain’ the level of happiness of an individual independent of all other factors (e.g. income)? Economic/financial Social Environmental

Income is significantly related to life satisfaction - but only to a point. Threshold level of income (a gross household income of €57,900), after which returns to well- being from higher income rapidly diminish Employment status: independent of income etc, unemployment significantly reduces well-being Part-time employment for men and lack of housing tenure also negative Living in social housing very negative Economic/financial determinants of well-being

Young and old are less satisfied with their lives, with a turning point at 55 years. Males are less satisfied with life than females. Separated/divorced is negatively associated with life satisfaction compared to being single. No difference between married and single respondents, (possible explanation is low divorce rate). Having 3 or more children is associated with less contentment Health: inverse relationship between number of doctor visits and life satisfaction; self-reported health and life satisfaction are highly (positively) correlated. Married males less satisfied with life than are their married female counterparts and, indeed, less happy than single males! Being a single parent is negatively associated with life satisfaction. Everything else being equal, reduces life satisfaction by over one third of a category on the seven point scale. But: only in households in which there are no other adults. Social determinants of well-being

Utilised GIS to ‘link’ people to their surrounding environment: Proximity to a landfill site is negatively related to well-being Living 2km or less from a coast increases life satisfaction by over ¾ of a category Access to transport routes is an amenity and disamenity depending on distance Environmental determinants of well-being

Why are Dubliners less happy? Analysis shows that it is lower environmental quality that explains Dublin’s lower happiness levels After income, employment status, and marital status environmental factors are the next most significant determinants of well- being

Towards an evidence-base for policymaking Ireland’s GDP and GNP have risen dramatically, but this research shows that money is only one factor that influences the well-being of society. Moreover, monetary measures at the macro level give no indication of the sustainability of an economy. There are alternative measures of progress and success Government must invest in research that provides an evidence-base that allows more sophisticated policymaking in comparison to the reliance on such traditional monetary measures including tracking well-being and its determinants over time Principal goal of public policy - to improve the well-being. Impossible if you do not know the most important factors that influence the well-being of Irish people? Research is required to set priorities for policy - economic, social and environmental

It‘s not just the economy Stupid!