The Potential Wellbeing of Nations: Conceptualization and Measurement

Abstract

To compare the potential wellbeing/happiness that world countries are able to offer their citizens at birth, we address the twin problems of indicator selection and index construction. We firstly argue against intuitive massive lists of issues. Instead, we employ 4 clearcut criteria to identify the dimensions relevant to the wellbeing and happiness of citizens; endorsing the non- comparability of issues then prohibits using utilitarian averaging of scaled variables. Sticking to an ordinal approach, we propose a consensual aggregation à la Kemeny/Condorcet. The empirical part gathers the needed information for 177 countries and produces a robust country ranking thanks to a novel pseudo algorithm. Lastly, to account for the subjective value of a “nice weather”, we gather climate variables and compute (in the same fashion) a quite distinct climate classification of countries. A tentative mix of the two approaches is offered.

Keywords: Human Development, Wellbeing, Composite Indices, Voting, Condorcet, Social Choice

JEL Classification: F63, I15, I25, D63, D73