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AHandbookforWellbeingPolicy-Making
AHandbookfor WellbeingPolicy-Making
History,Theory,Measurement,
Implementation,andExamples
PAULFRIJTERSANDCHRISTIANKREKEL
GreatClarendonStreet,Oxford,OX26DP, UnitedKingdom
OxfordUniversityPressisadepartmentoftheUniversityofOxford. ItfurtherstheUniversity’sobjectiveofexcellenceinresearch,scholarship, andeducationbypublishingworldwide.Oxfordisaregisteredtrademarkof OxfordUniversityPressintheUKandincertainothercountries
©PaulFrijtersandChristianKrekel2021
Themoralrightsoftheauthorshavebeenasserted FirstEditionpublishedin2021
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Youmustnotcirculatethisworkinanyotherform andyoumustimposethissameconditiononanyacquirer
PublishedintheUnitedStatesofAmericabyOxfordUniversityPress 198MadisonAvenue,NewYork,NY10016,UnitedStatesofAmerica
BritishLibraryCataloguinginPublicationData Dataavailable
LibraryofCongressControlNumber:2020949071
ISBN978–0–19–289680–3
DOI:10.1093/oso/9780192896803.001.0001
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Foreword
‘Thelifeandhappinessofthepeopleisthesolelegitimateobjectofgovernment.’ So saidThomasJefferson.Itwasperhapsthegreatestideaofthemodernage thatwe judgeoursocietiesbyhowmuchourcitizensareenjoyingtheirlives.Andtheroleof publicpolicyisthereforetocreatetheconditionswhichmaximizetheirwellbeing.
Theideaisovertwohundredyearsold.Butuntilrecentlytherewasnoscientific wayofimplementingtheidea,usingactualnumbers.However,thankstothenew scienceofwellbeing,allthatischanging,andsoistheattitudeofpoliticians. ThankstotheleadershipoftheOECD,allmembercountriesnowmeasurethe wellbeingoftheircitizensonanannualbasis.¹AndrecentlytheEuropeanCouncil calledonitsmemberstatesto ‘putpeopleandtheirwellbeingatthecentreof policydesign’.²Somecountriesarealreadydoingthis,includingNewZealand, Scotland,andIceland.
ButthemainconstraintinapplyingthisgreatEnlightenmentprincipleisthe lackofeasilyaccessiblenumbersandaclearmethodology.Thisbookisan outstandingefforttoremedythatshortcoming.Itlaysoutthewayforwardfor allpolicy-making.Wherethepolicyinvolvesmoney,themoneyshouldbeallocatedtopolicieswhichgeneratethemostwellbeingperunitofexpenditure.And similarprinciplesapplytotaxandregulation.
Thisbooksuppliesnotonlyamethodologybutalsoagoodarrayofnumerical estimateswhichpolicyanalystscanuseinapplyingthemethodology.Andthe bookisalsodeeplythoughtful itisnotacookbookbutanintellectualguideto themanyproblemswhichariseinanypolicyanalysis.
PaulFrijtershasbeenoneoftheleadingthinkersonwellbeingformanyyears, andChristianKrekelisapromisingscholarfromtheyoungergeneration.The WhatWorksCentreforWellbeingmadeagoodchoiceinsupportingthiswork, whichsuppliesacriticalneed.Theauthorshaveprovideduswiththetools.Now letsusputthemtouse.
ProfessorLordRichardLayard LondonSchoolofEconomics
October2020
¹Durand(2018).Countries’ ExperienceswithWell-beingandHappinessMetrics.InJ.Helliwell, R.LayardandJ.Sachs(eds), GlobalHappinessPolicyReport.NewYork:SustainableDevelopment SolutionsNetwork.
²CounciloftheEuropeanUnion(October2019).TheEconomyofWellbeing:Creating OpportunitiesforPeople’sWellbeingandEconomicGrowth.P.R.Committee.Brussels:Councilof theEuropeanUnion.DraftCouncilConclusionsontheEconomyofWellbeing.
Preface
ThisbookfollowsthetraditionoftheEnlightenmentthinkerstoseethewellbeing ofthepopulationastheultimategoalofgovernment.Whatisnewisthatwe openlylookathowtoimplementthisgoalbyusingdirectmeasuresofthe subjectivewellbeingofthepopulation,ratherthaninferredmeasureswhich havedominatedhitherto.Over fiftyyearsofanalysiswithmillionsofrespondents innearlyallcountriesoftheworldhasuncoveredgeneralpatternsthatareuseful androbusttothecritiquethatsubjectivewellbeinghaslimitedaccuracyandis easilymanipulated.
Weinvitethereaderonajourneywithaclearhistoricalpurpose,whichisto grapplewiththedifficultiesoftrulyenactingtheidealthathasunderlinedour systemofgovernmentforcenturies.Thisbookshouldbeunderstoodaspartof thatjourney:justastepalongtheway.³
The firstoutof fivechapterscoversthebasicideaofhowwellbeingpolicymakingwouldwork,includingadiscussionofhowitwould fitinwithdemocracy andtherealityofbureaucracies.Itsetsoutasuggestedroadmapforhowwellbeing canbecomemoreintegratedinanationalpublicservice,boththatoftheUnited Kingdomandofothercountries.Thispartisforanyonewithageneralinterestin policyandwellbeing,butwillalreadybefamiliartomostpractitioners.
Chapter2synthesizestheknowledgetheliteraturehasyieldedonwellbeing.It discussesmeasurement,basic findings,someofthemaintheories,andsomeofthe openquestions.Itendswithamentalframeworkforhowtoseewellbeingwithin thewidersocio-economiccontext,whichisthenappliedtomentalhealthprogrammesandthequestionofhowwecouldthinkabouttheexpendituresof differentgovernmentdepartments.Thispartisusefulforanyoneprofessionally interestedinhowtoimprovethewellbeingofthegeneralpopulation,their employees,orothersintheircare.
Chapter3presentsthemethodologyforwellbeingpolicyevaluationsand appraisals,⁴ developingtechnicalstandardsandcoveringmanyimplementation issueslikedouble-counting,theoptimaluseofliterature,andsomeofthepracticalitiesofhowtocountwhat.Thispartisusefulforthoseprofessionally interestedinquantifyingthewellbeingeffectsofsomepolicyorintervention,
³Whilethewritingofthisbookwasco-sponsoredbysevenUKgovernmentdepartmentsand agencies,thisbookreflectstheauthors’ ownopinionsandisnotofficiallyendorsedbyanygovernment.
⁴ Anevaluationisan expost assessmentofhowanactualpolicyorinterventionworkedout.An appraisalisan exante assessmentofapolicyorinterventioncontemplated.
whichincludesregulations.Itisthemosttechnicalpartandcouldserveasa guidanceforexpertsifwellbeingpolicyistobeimplemented,withmanyexamples toshowhowitwouldworkinpractice,andwithlistsofavailabledatasetsand adviceonhowtointegrate findingsusingdifferentwellbeingmeasures.
Chapter4discussesexistingapproachestopolicyevaluationandappraisals, particularlycost-benefitanalysesastheyarepracticedintheUnitedKingdomand elsewhere,butalsowellbeingframeworksandapproachesfromaroundtheworld. Thisagainisalargelytechnicaldiscussionthatisusefulforthosecurrentlydoing policyevaluationsandappraisals,includingbusinesscases,impactcases,ormulticriterionapproaches.Wederiveanddiscussthemostappropriatewaysofmonetizingwellbeingimpactsincurrentstandardcost-benefitanalyses,andwe comparetheQALY(quality-adjustedlife-years)approachwiththeWELLBY (wellbeing-years)approach.Thediscussiononwellbeingframeworksand approachesfromaroundtheworldisusefulforthosethinkingofpushingtheir owncountryororganizationtowardsaparticularwellbeingmeasurementsystem, asitlaysoutwhattypeofbureaucraticculture fitswithdifferentwellbeing approaches.
Chapter5discussessevenexamples,sixofwhichareexamplesfromUK governmentdepartments,theWelshgovernment,andothergroupsthatfunded thisbook.Theseexamplesshowhowawellbeingorientationchangeswhatone looksatandhowonecalculatesthings.Theyincludethequestionofoptimal surveydesign,theissueofhowtoevaluatetheHullCityofCulture2017project fromawellbeingperspective,aWelshvocationaltraineeshipprogramme,aStone Hengeorientedprogrammetohelppeoplewhosufferfromchronicmentalill health,astudyintotheimpactofcommutingonpeople’slives,andtheHeathrow airportexpansionevaluation.Aseventhexampleisanevaluationofthepolicy responsestotheCovid-19pandemicbygovernmentsaroundtheworld,comparingthecostsandbenefitsofdifferentpoliciesbytranslatingalleffectsintooneunit ofaccount:wellbeing.
Acknowledgements
ThisbookislargelytheresultofaprojectthatstartedinNovember2018asan ESRCgrantwithco-fundingbyUKgovernmentdepartmentsandagencies⁵ via theWhatWorksCentreforWellbeing.Therewerethreeroundsofwritingand feedback,culminatingin finalworkshopstodisseminatethemethodological recommendations.Ontopofthatwereseveralfurtherroundsoffeedbackand additionsduetothereviewerandeditorcommentsatOxfordUniversityPress. Themainadditionalworkaddedinthoselastroundswastomakethebookmore internationalratherthansolelyUK-focused.
Thisbookthusstandsontheshouldersofmanywhogavetheirtimeandenergy tomakeitagoodguideforwellbeingpolicy-making.
WewouldliketothankNancyHey,DeborahHardoon,andSarahMcLennan fromtheWhatWorksCentreforWellbeing.Theyopeneddoors,pulledoffthe immenselogisticalpuzzleofjugglingmanystakeholdersandinstitutionstopave thewayforthisendeavour,putupwithourinitialignoranceoftheworldof policy,andguidedustowhat’spossibleandwhat’susefulinthatworld.Webeg theirforgivenessfortheremainingimperfectionsandhopethattheyandtheir successorsattheWhatWorksCentreforWellbeingwillfeeltheyco-ownthe resultandwillre-shapethematerialwhentheneedcallsforit:thiswasalways meantasalivingdocument,sowehopebook1.0willbefollowedbymany extensionsandupdates.
Next,wewouldliketothankalltheacademicswhoputinsuchaneffortto wadethroughthemanyearlyversionsandprovidedusefulcomments,corrections,andsuggestionstomakesureweareasacademicallyhonestaspossible.We adoptedmostofthecommentsandquietlyignoredthefewwecouldn’t.Sothanks toRichardCooksonandhisteamofhealtheconomistsatYork;MarkBryan,Sara Connolly,andKevinDanielsfromtheWhatWorksCentreforWellbeing:Work andLearningEvidenceProgramme(ESRCgrantnumber:ES/N003586/1); AndrewOswaldfromWarwick;GigiFosterfromtheUniversityofNewSouth Wales;RichardLayardfromtheLondonSchoolofEconomicsandMichaelPlant fromOxford;andCarolGrahamfromtheBrookingsInstitution.Becauseofuseful WhatWorksCentreforWellbeingdiscussionsatmanagementmeetings,and
⁵ IncludingArtsCouncilEngland;DepartmentforBusiness,EnergyandIndustrialStrategy; DepartmentforDigital,Culture,MediaandSport;DepartmentforTransport;DepartmentforWork andPensions;HistoricEngland;SportEngland;theMinistryofHousing,CommunitiesandLocal Government;andtheWelshgovernment.
otherCentreevents,wewouldalsoliketoacknowledgetheotherevidence programmesoftheWhatWorksCentreforWellbeing:Communities(ESRC: ES/N003756/1)andCultureandSport(ES/N003721/1).
Wewouldalsoliketothankthemanygovernmenteconomists,policy-makers, andanalystswhoprovidedcomments,critiques,andsuggestionstoearlierversions.Inparticular,wewanttothankthosewhogaveadviceonthegeneral structureandwholechapters.SothankstoPhillipBallandhisteamattheUK DepartmentofDigital,Culture,MediaandSports;IvenSteadandhisteamatthe UKDepartmentforTransport;AdalaLeesonandherteamfromHistoric England;andCaraMaguireandherteamattheUKDepartmentforBusiness, EnergyandIndustrialStrategy.Thisversiondiffersmarkedlyfromtheprevious versionsmainlyduetotheirfeedbackonhowthingsworkinpractice.
Naturally,wethankEkaterina(Katya)OparinaandPierceGatelyforexcellent researchassistance.WethanktheteamattheCentreforEconomicPerformance (CEP)attheLondonSchoolofEconomics,includingHarrietOgbornandJo Cantlay,whohelpedsmooththeway.ClémentBélletandAndrewClark,coauthorswhowrotepiecesfromwhichweextensivelyquote,alsodeserveaspecial thanks.
Ofcourse,wealsothankthesponsorswhopaidthebills.Theseincludethe EconomicandSocialResearchCouncil(ESRCgrantnumber:ES/N003683/1) whichwassupplementedbyequal-matchedpublic-sectorfundingviatheWhat WorksCentreforWellbeing.TheAustralianResearchCouncilFutureFellowship (ARC:FT130100738)alsodeservesmentioningasalotofthegroundworkforthe frameworksandanalysisinthisbookwasdevelopedintheperiodofthisgrant (2013–16).
TheteamatOxfordUniversityPressalsoprovidedinvaluablehelp;special thankstoAdamSwallowandEleanorCapel-Smith.
Thesekindsofendeavoursinevitablyinvolvethesupportoflovedones,soPaul thanksErikaTurkstraandChristianthanksHertaWagner-Krekel,KlausKrekel, andClarynKung.
1.TheCaseforWellbeingastheGoalofGovernmentand ConstraintsonPolicy-making1 Preview1 QuoVadis?TheBasicIdea1 ABriefHistory6 HowWellbeingCouldFitintoPolicyEvaluationsandAppraisals18 TheRealitiesofPolicy-makingandtheUseofWellbeingInformation22 ConclusionandtheWayAhead34 Literature36
2.WellbeingMeasurementandPolicyDesign Measures, KeyFindings,andWellbeingFrameworks40 Preview40 DirectMeasurementofWellbeing40 InfluencesofSurveyDesignonWellbeingMeasures58 StylizedFactsonWellbeing59 KeyLessonsonWellbeing64 EstimatesofKeyWellbeingEffects74 Example:TheLong-runWellbeingBenefitsofMore Money WhatWeNowKnowfromaSwedishLottery75 GeneralWellbeingLessonsforPolicy:Theory,Evidence,and Implications81 WhatWeDoNotYetKnoworAreontheFenceabout112 AnEconomicFrameworkandSomeApplications117 ATaxonomyofGovernmentExpenditures129 ConclusionandtheWayAhead132 Literature133
3.WellbeingPolicyEvaluationandAppraisal:Data,Methods, Literature,RulesofThumb,andTechnicalStandards149 Preview149 ANon-formalIntroductiontoWellbeingCEA152 WellbeingCEAMethodology161 WellbeingCEAExamples208 DatasetsonWellbeing230
ConversionbetweenDifferentScalesandIndicators ofWellbeing233 ConclusionandtheWayAhead233 Literature234
AppendixA:Data GeneralOverview240
AppendixB:Data TechnicalDetails251
AppendixC:Data DownloadLinksandSampleStudies260
AppendixD:ConversionbetweenDifferentScalesand IndicatorsofWellbeing266
AppendixE:HeadlineCost-effectivenessGraphandJustification oftheElements275
4.WellbeingCost-effectivenessAnalysisandExistingApproaches279 Preview279 AReminderofWellbeingCost-EffectivenessAnalysis280 ExistingCBA280 OnQALYsandWELLBYs282 MoneyandWellbeing287 Reflections:WhyDoTheseNumbersDifferSoMuch?290 OntheDifferenceinRationalityAssumptionsbetweenTraditional Cost-benefitandWellbeingCost-effectivenessAnalysis291 BusinessCasesandtheValueofWellbeing298 Cost-effectivenessAnalysisversusSocial-Rate-of-ReturnAnalysis299 Multi-criterionAnalysis301 WellbeingFrameworksaroundtheWorld308 ConclusionandtheWayAhead323 Literature325
Appendix:TheMonetaryValueofWellbeinginMathematical Notation329
5.ApplyingWellbeingInsightstoExistingPolicyEvaluationsand Appraisals333 Preview333
CaseStudy1:AYouthTraineeshipProgramme336 CaseStudy2:HumanHenge346 CaseStudy3:TheUKCityofCulture353 CaseStudy4:TheWellbeingCostsofCommuting370 CaseStudy5:TheLondon-HeathrowRunwayExpansion379 CaseStudy6:TheHealthandWellbeingatWorkSurvey395 CaseStudy7:AWellbeingCBAofCovid-19Containmentand EradicationPolicies407 ConclusionandtheWayAhead414 Literature415 Index 425
ListofFigures
0.1.CostperWELLBYofinterventionsatwork,intheenvironment,and governmentservicesxviii
1.1.Illustrativepolicydiscoveryprocesseswhenknowledgeofpossibilitiesis imperfect:Policydiscoveryprocess131
1.2.Illustrativepolicydiscoveryprocesseswhenknowledgeofpossibilitiesis imperfect:Policydiscoveryprocess231
1.3.Illustrativepolicydiscoveryprocesseswhenknowledgeofpossibilities isimperfect:Policydiscoveryprocess331
2.1.ExcerptfromDRMsurveys49
2.2.ExampleofHypotheticalScenarioSurvey52
2.3.FrequencydistributionoflifesatisfactionintheUnitedKingdom, France,andDenmark63
2.4.FrequencydistributionoflifesatisfactionintheUnitedKingdom64
2.5.Thecontributionofdifferentsocio-economicfactorstoexplained adultlifesatisfactionintheUnitedKingdom65
2.6.LifeexpectancyatbirthinyearsformalesintheUnitedKingdom71
2.7.LifeexpectancyatbirthinyearsforfemalesintheUnitedKingdom71
2.8.PeriodexpectationoflifeatbirthinyearsinEnglandandWales72
2.9.Lifeexpectancy,healthylifeexpectancy,andyearsspentinpoorhealth frombirthformales73
2.10.Lifeexpectancy,healthylifeexpectancy,andyearsspentinpoorhealth frombirthforfemales74
2.11.Thenationalsocio-economiccapital-production-investmentcycle119
2.12.OverviewoftheIAPTprogrammeanalyticalframework125
2.13.OverviewoftheIncredibleYearsanalyticalframework128
3.1.CostperWELLBYofinterventionsatwork,intheenvironment,and governmentservices150
3.2.Wellbeingcost-effectivenessdecisionswhenbudgetsarehighorlow168
3.3.Wellbeingcost-effectivenessdecisions:resultsofbargaining178
3.4.Wellbeingcost-effectivenessdecisions:dangerofescalatingcosts179
3.5.Causalstructureofthemodel222
3.6.ReductioninGHQ12scoresoftreatedpatients224
3.7.Reductionindepressionrateofwholepopulation225
3.8.Monetaryreturnspertreatedpatient225
3.9.Distributionofregionallifesatisfactionchangespercapita227
3.10.Distributionoflifesatisfactionchangespercapita228
3A.1.CostperWELLBY275
4.1.TheninedomainsofGrossNationalHappiness312
4.2.TheHow’sLifeframeworkformeasuringwellbeingandprogress314
5.1.CommunitypridebeforeandafterHull2017360
5.2.LifesatisfactionbeforeandafterHull2017360
5.3.LifesatisfactioninHullandthenearbyregionovertime361
5.4.Basiceconomiccaseforairportexpansionbenefits:statusquoassumptions381
5.5.Basiceconomiccaseforairportexpansionbenefits:capacityincrease381
5.6.Basiceconomiccaseforairportexpansionbenefits:capacityincrease effectonsurplus382
5.7.Effectofworkplacequalityonjobsatisfaction(International SocialSurveyProgramme,ModuleonWorkOrientations,2015; confidenceintervals95percent)398
5.8.Correlationbetweenemployeesatisfactionwithcompanyand firm performance(GallupClientDatabase,years1994to2015;confidence intervals95percent)399
ListofTables
2.1.Effectsofsurveydesigncharacteristicsonthemeasuredlevelsoflife satisfaction60
2.2.EffectsofGDPpercapita,householdincome,andpublicgoods67
2.3.Aselectionofkey findingsfromtheliteratureonlifesatisfaction76
3.1.Recommendedtechnicalstandards188
3.2.AtemplateforwellbeingCEAs209
3.3.WellbeingCEA:HousingFirst211
3.4.Wellbeingcost-effectivenessanalysis:Socio-emotionalskillstraining214
3.5.Assumptions216
3.6.Lifesatisfactionbenefits217
3.7.WellbeingCEA:AirpollutioninGermany218
3.8.WellbeingCEAtemplate229
3.9.WellbeingCEAcalculations231
3.10.Wellbeingcost-effectivenessratio233
3A.1.Data Generaloverview240
3A.2.Data Technicaldetails251
3A.3.Data Downloadlinksandsamplestudies260
3A.4.Impactofdifferentmeasuresonlife-satisfaction(0-to-10)270
3A.5.Spearmancorrelationsbetweenwellbeing,health,andsocialcaremeasures (datasets:HIPO,MIC,andSYC65)271
3A.6.Spearmancorrelationsbetweenwellbeingscoresandhealth(datasets, USocwave1andHSE)273
3A.7.Domainsatisfactionsaspredictorsoflifesatisfaction,BHPS1996–2009274
3A.8.Justificationofeachelementoftheheadlinecost-effectivenessgraph276
5.1.TraditionalCBA342
5.2.Wellbeing-augmentedCBA343
5.3.WellbeingCEA345
5.4.Cashandnon-cashcostsofHumanHengeproject348
5.5.TraditionalCBAofHull2017:economicbenefitsonly357
5.6.Wellbeing-augmentedCBAofHull2017:economicandsocialvaluebenefits362
5.7.Wellbeingcost-effectivenessanalysisofHull2017:wellbeingbenefits364
5.8.AppraisalresultsforLondon-HeathrowAirportNorthwestRunwayscheme, presentvalue(£billion,2014prices)383
5.9.AppraisalresultsforLondon-HeathrowAirportNorthwestRunwayscheme, presentvalue(£billion,2014prices).Improvedintangiblevaluation388
5.10.AppraisalresultsforLondon-HeathrowAirportNorthwestRunwayscheme, presentvalue(£billion,2014prices):50percentEasterlinDiscountand re-arranged391
QuickPreviewoftheMainIdeas
Thefundamentalideaofthisbookisthatweshouldmeasuresocietalprogressin termsofadditionalwellbeingtothepopulation.Theunitofmeasureisthe WELLBY:oneunitoflifesatisfactionona0-to-10scaleforonepersonforone year.
Weadvocatetheadoptionofaninstitutionaltrajectorytoabsorbthekey lessonsthatmillionsofobservationsinoverahundredthousandstudiesinnearly allcountriesoftheworldhavegivenusastohowtoincreasewellbeing.Theroad aheadwouldinvolveembeddingexperimentationandmeasurementasanormal activityinthepublicsector,aswellasstructurestolearndo’sanddon’tsof experimentation.Itwouldinvolvetheadoptionofwholelistsofestimatedeffects ofpolicy-sensitivecircumstances(likehealth,employment,orairpollution)on wellbeing,aswellasaprocessviawhichbettermeasuresandbetterestimatescan replaceitemsonanyendorsedlist.Itwouldinvolvegeneratingframeworksfor thinkingabouthowthisorthatissueshouldbeseeninwellbeingterms(suchas howmentalhealthorparentingskillsrelatetowellbeing),aswellasaprocessfor updatingthoseframeworks.
Thisbookmakesmanyspecificsuggestionsfortheseelementsandadvocates particularnumbers,suchasthethresholdforthemarginalsocialproductioncosts ofaWELLBYagainstwhichnewpoliciescouldbejudged.Italsosuggestshow wellbeinganalysiscouldsimplybeaddedtoexistingcost-bene fitanalysesby adoptingawillingness-to-paynumberforthevalueofaWELLBY,illustrating thiswithexamplesfromdifferentUKdepartmentsandagenciesaswellas organizationsfromaroundtheworld.
Asapreviewoftheanalysesthisbookisultimatelytryingtonormalizeandlead to,considerFigure0.1below.This figureshowsestimatesforhowcost-effective fifteendifferentinterventionsindifferentcountriesareintermsofWELLBYper£. Itincludesexamplesofverydifferenttypesofinterventions,rangingfromworkplaceinterventions(theSTARinterventionintheUnitedStates),tohealth interventions(amental-healthinterventiontargetingdepressioninPakistan),to environmentalinterventions(reductionofairpollutionbyretrofittingfossilfuelledpowerplantsinGermany),tosubsidiesformedicine(theNICEitem),to culturalinterventions.Itthusshowshowpoliciesinverydifferentdomainscanbe comparedonasinglemetric theWELLBY usingtheunifyingconceptof wellbeing.
Housing First (homeless) NICE medicines London Olympics Human Henge NHS Marginal
STAR Work-life balance WTP for health improvement
IAPT Mental Health Programme (retired, cons.)
Hull City of Culture US health insurance UK National Lottery Wellbeing Programmes
Action for Happiness Problem solving training for flight attendants Air Pollution
IAPT Mental Health Programme (unempl., cons.)
Healthy Minds Pakistan mental health intervention
IAPT Mental Health (average)
Figure0.1 CostperWELLBYofinterventionsatwork,intheenvironment,andgovernmentservices
Source :Ownillustrationbasedonowncalculations.
Thisisnottheplacetodiscussthese fifteeninterventionsindepthastheyare onlyforillustrativepurposesandtheactualvalue-for-moneyestimatesarehighly uncertain.
Yet,somecrucialideasthatareusedinthis figureandsomebasicinformation tounderstandthe figureare:
• AWELLBYisoneunitoflifesatisfactionona0-to-10scaleforonepersonfor oneyear.Seechapter2.
• Costsareintermsofnet£tothepublicpurseastheywouldapplytotheUnited Kingdom(soUKpricesonthingslikehousing).Thenetcostsincludeup-front costsand flowsintooroutofthepublicpurse,includingchangesintaxesand benefits.Seechapter3.
• Allmonetaryeffectsthatarenotonthepublicpurseareincludedinthe WELLBYeffect,whichhenceinvolvesatranslationfromconsumptionlevelsto wellbeing.Seechapter4.
• ThecalculationrequiresassumptionsonhowtheWELLBYrelatestoother majornon-materialfactors,suchasemployment(chapter2),mentalandsocioemotionalskills(chapter2),health(chapter4),culture(chapter5),andsoon.
• Thebreadthoftheinterventionsshowninthis figureentailsaverybasicguess astohowmuchup-frontpubliccostswouldbeinvolvedifonewouldscaleup theinterventiontothelevelofthewholepopulation.Soa ‘thin’ intervention, likeanemployeework-planningintervention,isonewhichwedonotbelieve wouldcostmorethan£1billionintotalwhenscalingitup.The ‘thick’ interventionsarethosethatcouldincludemorethan£10billionofpublic moneyupfront.
• Thescaleislogarithmic,meaningthatverticalspacetranslatesto£ proportionally.
• Thedottedverticallineshowsthesuggestedthresholdforadoptionbythe publicsector.Thisthresholdisderivedfromadditionalphysicalhealth spendingintheUnitedKingdomonthingslikecancertreatments.Seechapters 3and4.
Theappendixinchapter3talksthroughthemainassumptionsanddescriptionsofthe fifteeninterventionsinFigure0.1,withreferencestothekeystudies fromwhichestimatesweretaken.
TheCaseforWellbeingastheGoal ofGovernmentandConstraints onPolicy-making
Preview
Thischapterisforreadersinterestedinthegeneralpushtoincludewellbeingin governments’ policy-makinginstitutions.Wediscusstheoriginoftheideathat governmentsshouldcareaboutwellbeing;howwellbeingisalreadyincorporated inmanypolicyevaluationsandappraisals;howawellbeing-orientedstatebureaucracy fitsinwiththedemocraticprocess;andhowtherealitiesofpolicymakingoftenlimittheuseofformalwellbeinganalysesandgiverisetothe importanceofgeneralknowledgeaboutwellbeingamongstalldecision-makers.
Tostartoff,wegiveaquicksynopsisofthebasicvisionattheheartofthisbook: what ‘morewellbeing’ wouldmeanforpolicy-makingandwhatstepswouldneed tobetakentorealizeit.Itisthisbasicvisionwhichwillunfoldinthedifferent chaptersthatfollowandwhichformsourbasicmotivation.Thechapterendswith aquickoverviewoftheinstitutionaltrajectoryyettobeundertakentohave wellbeingpolicyembeddedinthegovernmentmachinery.
QuoVadis?TheBasicIdea
Thebasicideaof ‘morewellbeing’ meansthatgovernmentsandpolicy-making institutionsshouldopenlyadoptanactualmeasureofwellbeingandmakethe wellbeingofthepopulationtheprimaryobjectiveofpolicy-making.
Inmanyways,GDPplaystheroletodayofwhatweenvisiontobeplayedby wellbeinginthefuture.True,ahigherGDPisknowntobesomewhatgoodfor wellbeingandallkindsofoutcomesoneexpectstoincreasewellbeinginthelong run,suchashealthandeducation(Weimannetal.,2015).Yet,therearemore thingstolifethanjustmarketgoods.ApurefocusonGDPmissestheharm economicactivitycandoto,forexample,socialrelationshipsortheenvironment. Inthissense,abroaderperspectiveisneeded particularlysincethemainmaterialbottlenecksthatweresoimportantinpreviouscenturiesdominatedbypoverty
AHandbookforWellbeingPolicy-Making:History,Theory,Measurement,Implementation,andExamples.PaulFrijtersand ChristianKrekel,OxfordUniversityPress(2021).©PaulFrijtersandChristianKrekel. DOI:10.1093/oso/9780192896803.003.0001
anddeprivationhavenowbeenlargelyovercome,atleastinmanymiddletohighincomecountriesandforlargesharesofthepopulation.
Oneofthemostoftenusedmeasuresofindividualwellbeingthatthescientific literaturehascomeupwithislifesatisfaction.¹TheOfficeforNationalStatistics (ONS)intheUnitedKingdom,forexample,hasincludedthefollowingLikertscalequestioninmorethanfortydatasetssince2011,withhundredsmorearound theworldincludingasimilarversion:
‘Overall,howsatisfiedareyouwithyourlifenowadays?’ 0means ‘notatall’,10 ‘completely’
Thisquestion,orclosevariantsofit,hasbeenposedtomillionsofUKresidents andtensofmillionsofpeoplearoundtheworldeversincetheLikertscalewas introducedinthe1930s,roughlyatthesametimethatGDPmeasurementwas introduced.
Thequestionissubjective,andthatispreciselythepointofgoingtowards wellbeingmeasurement:ourlivesaresubjectiveandwhatwevalueasindividuals issubjective.
Onewaytointerpretthisquestionisthatanswersconsistofavotebyindividualsastohowwelltheyaredoingintheirlife.Thismaybeseenasaugmenting votingforpoliticalparties,whichhappensonlyinfrequentlyandisonlyabroad signalofwhatthepopulationwants.Havinginformationonhowindividuals evaluatetheirlivesgivesmuchmoreinformationonwhattheyactuallyvalue andhowtheirlivescanbeimproved.
Usingsubjectiveinformationalongsideelectoralinformationisnormalalready inthepublicservice.Ahospitaldoesnotaskpatientswhichhealthpolicythey favour,butratherhowtheirhealthisinordertoascertaintheirneeds.Thisisalso thecentralideaofmeasuringwellbeing thatwetakeseriouslyhowpeoplejudge theirownlivestoascertainhowwemighthelpimprovethoselives.
Therearemanyalternativemeasuresandindicesonecouldusetomeasurethe wellbeingofindividualsorwholecountries.BesidesGDP,examplesinclude: literacyandnumeracyrates,healthoutcomes,suiciderates,crime,orindices thataggregatehundredsofindividualitems.
Althoughthereisinformationineachwellbeingmeasureandindex,these alternativesareoftennotparticularlyusefulforeithercentraltrade-offsoractual policyscenarios.Indiceswithhundredsofquestionsbehindthem,suchasthe
¹Onlanguage:becausethehistoryofwellbeinginWesternthoughthassuchalongtradition, differentwordshavebeenusedovertimeandthemeaningofwordsdifferfromperiodtoperiodand fromscholartoscholar.Wewillusethewords subjectivewellbeing, wellbeing, lifesatisfaction,and happiness interchangeablybutwillbemorepreciseinhowtheysubtlydifferwhenwetalkabout measurementinchapter2.
SustainableDevelopmentGoals(SDGs),aresimplytoocumbersometomeasure formanyindividualsinmanyscenarios,makingthemtoounwieldlyforanysmall ormedium-levelpolicyscenario.Forcentraltrade-offs,anymulti-itemindexfaces theissueofhowtochoosetheweightsbetweenitscomponents:howtodetermine howmuch,say,infantmortalityisworthvis-à-visliteracyandnumeracyrates?In currentpractice,theweightsaremadeupadhoc(Gruen,2017),butamoreproper weightingwouldneedaclearchoiceforwhatisregardedasthebestindicatorof whatpeopletrulywant.Wearguethatlifesatisfactionisthebestcandidateat present,thoughoneshouldovertimethinkofaprocessofchallengeandupdates shouldbettermeasuresemerge.
Whatmakeslifesatisfactionappealingisthatindividualshavenotroubleor hesitationinansweringit.²Moreover,itischeaptocollectandarealisticoption fornearlyalldatasets.Answerstothelife-satisfactionquestioncorrelatepositively withalmosteverythingoneintuitivelythinkswouldbegoodforwellbeing,suchas socialrelationships(Powdthavee,2008),health(Helliwelletal.,2020),orwealth (HeadeyandWooden,2004).Happierindividualsaremoreproductive(DeNeve andOswald,2012;Oswaldetal.,2015),morepro-social(Drouvelisand Grosskopf,2016),lessoftensick(Cohenetal.,2006),andlivelonger(Diener andChan,2011;SteptoeandWardle,2011).Mostindividualsagreeinsurveys askingthemwhatthey findimportantthatlifesatisfaction fitstheiroverallgoalin life(Benjaminetal.,2012).Finally,individualswhoaremoresatisfiedwiththeir livesaremorelikelytoviewthecurrentgovernmentfavourably(Ward,2019), makinglifesatisfactionanaturalobjectiveforelectedpoliticians.
Althoughwearguethatlifesatisfactionisthebestsinglemeasurewehaveat present,ithasmany flawsanditsuserequirescarefulknowledgeofsurveydesign andstatisticalanalysis.Measuresoflifesatisfactioncanbeeasilymanipulatedby primingindividualstothinkofsomethingpositivebeforeaskingthemabouttheir satisfactionwithlife(see,forexample,Dieneretal.(2013)forasummaryofthis effectinpaststudies).Answersarecoarseinthesensethatindividualsgivewhole numbersandnotsomethinginbetween.Individualvariationishighsuchthat evenattheindividualleveloneneedsmanymeasurementpointstosayanything withconfidence.Therearestrongseasonal,survey-specific(Smith,1979),andagespecificeffects(Pawlowskietal.,2011).
Importantly,individualswithhigherlifesatisfactionaremorelikelytohaveall kindsofothergoodoutcomes,whichmakesitdifficultforresearcherstoseparate ²Forexample,themissingrateforresponsestoquestionsonlifesatisfactionintheBritish HouseholdPanelSurvey(BHPS)acrosswavesisabout2percent(Powdthavee,2008).Similarly,for theCanadianGeneralSocialSurvey(GSS)andtheCanadianCommunityHealthSurvey(CCHS), between96percentand99percentofsurveyparticipantsofferedavalidresponsetothequestionon lifesatisfactionduringtheperiodfrom2003to2011.See:https://www150.statcan.gc.ca/n1/pub/ 11f0019m/2013351/part-partie1-eng.htm#h2_4.
theeffectsofcircumstancesonlifesatisfactionfromtheeffectsofselectionof moresatisfiedindividualsintothesecircumstances.Forexample,whilepartners andjobsincreaselifesatisfaction,itisalsotruethatthemoresatisfiedindividuals finditeasiertohavepartnersandjobs,makingitdifficulttoinfercausalityfrom wellbeingdata.
Nevertheless,wenowhaveovereightyyearsofexperiencewithanalysinglife satisfaction,anexperiencethathasledtomorethan170,000studiesintoits determinants.Thereisagrowingbodyofrobuststudieslookingatnaturaland quasi-naturalexperiments,randomizedcontrolledtrials,andlarge-scaleanalyses ofwhatimprovesthewellbeingofindividuals,households,communities,and wholecountries(Dieneretal.,2018).
Inessence,thisiswhatthewellbeingliteratureholdsasapromisetothepublic sector:ahugeexistingandexpandingdatabaseofrelevantknowledgeofwhat trulymatterstoindividuals,ameasurement-basedunderstandingastowhat degreespeci ficfactorsanddomainsmatter,andanempiricaltoolkittoascertain bothwhatisgoingonatpresentandtotracktheeffectsofpoliciesovertimein bothsmallandlargepopulations.
Throughoutthisbook,weproposeavisionofaself-awareandcontinuously measuringpublicsectorthatuseslifesatisfactionasthekeylinkbetweenits policiesandtheoverallwellbeingofthepopulation.
Thisvisionoffersdifferentoutlookstodifferentgovernmentinstitutions:
1.Forsomeofthemajorpublic-servicedepartments,suchassocialprotection andhealth,lifesatisfactioncanbethe directgoalofpolicy.Departments, councils,andvariousotherinstitutionscanmonitorthewellbeingofthe populationundertheircareandexperimentcontinuouslywithnewprogrammesorchangeoldones, findingoutinanevolutionarymannerwhat worksbestinwhatsituation.Centralinformationhubslike WhatWorks Centres couldhelpkeeptrackofwhathasbeentriedandwhathasbeen foundtoworkornot.
2.Forotherdepartments,includingsomemajorspendingdepartments,life satisfactioncanbethe indirectgoalofpolicy,whilefocusingdirectlyon somethingmorespecific.Transportandtheenvironment,forexample, couldaimprimarilyattheparticulargoalstheyhave(likeareductionin commutingtimeoranimprovementofairquality),basingthemselveson establishedconnectionsbetweenthoseparticulargoalsandwellbeing.This isprobablythepracticalwayforwardformanydepartmentswhichlackthe individualcapacityto figureouthowtheirenterpriseenhancesthewellbeing ofthewholepopulation.Theywouldneedtobesuppliedwithcentrally vettednumbersastohowmuchtheirindividualaimsincreasepopulation
wellbeing,andwhattherulesofthumbareastotheexternaleffectsthey wouldneedtolookoutfor.
3.For ‘enablingdepartments’ whoseactivitiesarebynaturebroadandlacka clearlydefinedgroupofclients,likedefenceornationalauditinstitutions, wellbeingoffersanarrativeandasetofsomewhatimpreciselinkages betweentheiractivitiesandthewellbeingofthepopulation.Itisnotrealistic toexpectthedefencebudgetorthebudgetfornationalarttobebasedon exactestimatesofthewellbeingvalueofapieceofmilitaryequipmentorart. Yet,bothcanbegroundedsomewhatinawellbeingnarrativethatmakes theiroverallplaceintheschemeofthingsclearandthat,perhapsina processofdecades,canbecomemoreprecise.Weknow,forexample,thata senseofculturaldistinctivenessandpride,whichisoneofthegoalsof nationalart,helpstoengendermoresocialcohesionasitpromotesasense ofsharedcultureandgoals.Pro-socialbehaviour,taxmorale,adherenceto laws,andeventhewillingnessto fightforone’scountryarehigherin populationswhichshareastrongcommonidentity(FrijtersandFoster, 2013),whichinturngivesarationaletojointlycelebratednationalevents. Justhowmuchwellbeingthisultimatelygenerateswillremainextremely speculative,butthatdoesnotmeanitistrivialorshouldbeignored. Wellbeingthusoffersageneralroutetowardsthelonger-termaccountabilityofenablingdepartments.
4.Inalldepartments,knowledgeofhowwellbeingisincreasedintheworkplaceandinorganizationsmoregenerallyisofpracticalanddirectselfinterestintermsofhowtheyorganizetheirownworkplacesandthosethey oversee.Hereagain,knowledgecouldbeassembledandvettedbycentral informationhubslikeWhatWorksCentres.
5.Inalldepartments,wellbeingcanbeusedtoinformthegeneralpublicand civilservantsastohowpleasantitisindifferentareasaswellasindifferent partsofthestatebureaucracy.Thisalreadyhappenstoalargedegree,but canbeintegratedinmanagement,localaccountability,andjob-search proceduresevenmorethanisalreadydoneatpresent.Budgetscan,for example,bepresentedintermsofwellbeingeffectsandtheirdistribution,as aformofwellbeingaccountabilitytothepopulation.
6.Foranalystsinsidedepartments,theexistingandrapidlyexpandingwellbeingliteratureoffersanalternativesourceofestimatesofvaluethatcan eitheraugmentstandardcost-benefitanalyses(CBAs)withwellbeing insightsorcompletelyreplacethemwithexplicitwellbeingcosteffectivenessanalyses.Centralallocationoffundscanthusrankdifferent policiesintermsoftheiroverallwellbeingvalueformoney,leadingtoa fundingcut-offpointgivenbythelastprojectstillfunded.
