3.1 Economic Well-being Flashcards
(12 cards)
(n/f) economic well-being
A broad measure of the quality of life and standard of living, including material and non-material aspects such as income, health, education, environment, security, and life satisfaction — not just economic output.
Economic wellbeing includes:
● present and future financial security
● ability to meet basic needs
● ability to make economic choices permitting achievement of personal satisfaction
● ability to maintain adequate income levels over the long term.
It is important to note that there are large differences in economic well-being between countries and within the same country.
composite indicator
An index that combines multiple indicators (economic, social, or environmental) into a single measure to give a more complete picture of a concept — often used to assess development or well-being. It’s an average of more than one economic variable, for example HDI.
OECD better life index
A composite index that compares well-being across countries, based on several dimensions that the OECD has identified as essential, in the areas of material living conditions and quality of ife. Measures well-being across 11 dimensions such as income, education, environment, health, and work-life balance — allowing people to customize the weighting of the indicators.
happiness index
A ranking of countries based on self-reported life satisfaction, using survey data and variables like GDP per capita, social support, life expectancy, freedom, generosity, and corruption.
happy planet index (HPI)
A composite index that combines four elements to show how efficiently residents of different countries are using environmental resources to lead long, happy lives. The elements are well-being, life expectancy, inequality of outcomes and ecological footprint.
sustainability
The ability to meet the needs of the present without compromising the ability of future generations to meet their own needs — includes environmental, social, and economic dimensions.
Human Development Index (HDI)
A composite index used to measure levels of development by combining three key dimensions:
* A long and healthy life – measured by life expectancy at birth
* Knowledge – measured by mean years of schooling and expected years of schooling
* A decent standard of living – measured by GNI per capita (PPP US$)
The HDI is published by the United Nations Development Programme (UNDP).
informal economy
The part of the economy where economic activity is not officially recorded, regulated, or taxed by the government.
As a result, its output is not included in a country’s national income (GDP or GNI) statistics.
economic development
A multidimensional concept referring to a sustained improvement in living standards.
It includes:
* Higher income levels and thus greater access to goods and services
* Improved health and education
* A better environment
* And increased individual empowerment
Higher income does not automatically lead to economic development, but to create economic development in the long-run, economic growth is needed. It does not only require higher income, and a lower rate of poverty, but would also be present when there is greater equality between groups of people (young vs. old, rural vs urban, female vs male, high income vs low income), more choice and opportunities and increased employment opportunities.
how do you measure economic wellbeing?
It is difficult to measure economic well-being due to the multidimensional nature of the concept. GDP, GNI or AD will therefore not be the most appropriate measures of economic well-being. However, these kinds of national income statistics are often used to judge standard of living. There are however other, better measures of well-being which include:
● OECD Better Life Index
● Happiness Index
● Happy Planet Index
what does the UN identify as the 3 pillars of sustainable development?
economic development
social development
environmental protection
which income groups does the World Bank assign economies to?
The World Bank assigns economies to four income groups:
1. Low income
2. Lower-middle income
3. Upper-middle income
4. high income
