Measuring Economic Well-Being In the Broader Context of Well Being
Well-being at micro level
At individual, family and even at community level, well being can be said to be a function of fulfilment of tangible needs, a sense of self-worth, social acceptability / belongingness to a family or a group and a sense of security. This broadly aligns with the Maslow’s theory of need hierarchy.
Economic well-being at individual, family or community level can be said to be the ability of attaining well being through self-effort, collaboration, interdependence, commerce and access to resources. Self-effort refers to having the strength, inclination and time to fulfil a need. Collaboration refers to having a network of people with similar needs, who can together achieve a higher level of need fulfilment vis-a-vis doing so alone. Interdependence refers to having a network of people, who may be willing to exchange competencies through a barter system. Commerce is where this exchange is done by way of paying money. Access to resources is refers to natural and other resources, which can fulfil needs or a progression towards well being.
Each of these can be referred to as economic resources. The availability of these resources is what makes it possible for people fulfil their needs (without considering it to be different from wants or desires). People, who have these resources can be plotted on the line of poverty of affluence, in other words economic well being.
Inadequacy of the current economic paradigm
The current economic paradigm measures commerce as the only method of need fulfilment, thereby measuring the financial value of products, services and assets. Consequently it refers to people as poor or rich on the basis of financial income or assets. It completely ignores self-effort, collaboration, interdependence as means to fulfilling needs and attaining wellness. Similarly, it also ignores the access to natural resources like rivers, mountains, climatic conditions, quality of air, water, animals, which can enhance the ability to attain wellness without entering into commercial engagements.
The challenge is in arriving at measurement matrices, which can accurately reflect the affluence (or poverty) of individuals, families and communities by considering all the means available to attain well-being. It may not be possible to have an objective measurement like gross household income or gross domestic product since it is not possible to convert the value of all economic resources in financial terms.
A subjective assessment may be required to be considered. The results may not be easily usable for arithmetic or statistical purposes. Nonetheless, the results of such a study are likely to be significantly more accurate than the existing methods.
By overcoming the challenge of developing a measurement matrix for economic well-being as stated above, there are multiple opportunities
- Near accurate assessment of poverty/affluence
- Macro-economic policy making in light of the results. Separate studies can be undertaken for different needs – education, healthcare, food, etc.
- A more meaningful directional guidance to government, non-governmental and business organisations