A composite view of well-being since 1820

Abstract

This chapter provides a parsimonious overview of the trends in various well-being dimensions covered in the previous chapters by constructing a composite index of well-being. It discusses the crucial problem of choosing a set of weights to calculate such a composite index. Related problems include normalisation of individual indices and dealing with missing observations. The chapter discusses the advantages of various options, and their implications for the final results. It finds that empirically a wide range of aggregation methods generate comparable results. They all indicate that progress in well-being was commonplace since the early 20th century, with the possible exception of Sub-Saharan Africa. It is also found that since the 1970s between-country inequality in composite well-being is lower than in GDP per capita, while being more pronounced in the period before.