Is there a correlation between well-being and wealth?
FOR more than 70 years, economists have been fixated with measuring economic ouput. Their chosen measure, gross domestic product, has limitations—it takes no account of natural-resource depletion and excludes unpaid services such as volunteering.
On May 24th the OECD launched its alternative measure of well-being which includes 20 different indicators across 11 sectors in its 34 member countries, from life satisfaction to air pollution. It has produced an interactive tool which allows users to change the weight of each sector according to their own view of its importance.
The chart below (from The Economist) shows the results of its headline Better Life index (which is equally weighted) plotted against GDP per person at purchasing-power parity (which adjusts GDP for differences in the cost of living across countries). Money may not buy you happiness. But it can buy a strong correlation with a fancy new index that aims to put a number on contentment.
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