Research
3 min read

How policymakers should measure wellbeing

There has never been a greater need for effective policy measurement in the UK.

The pandemic has forced the government into taking rapid decisions based on limited and fast-changing evidence. Small tweaks to legislation – an extra curfew here, an additional metre there, could have repercussions for a generation. 

Behavioural economists like myself have long argued for measures of wellbeing to replace, or at least complement, income and GDP as the primary measurement tool in policy assessments. And in recent years, policymakers have started to listen.

But even if governments accept that wellbeing is more important than money, how can they measure it?   

In a paper published in the British Medical Journal, I, alongside colleagues including former Cabinet Secretary Lord O’Donnell, set out a framework for evaluating policy decisions with a new kind of currency: wellbeing years, or WELLBYs, for short. 

Utilising extensive prior research on the ways in which different life experiences affect our subjective wellbeing, we translate individual life events into a single over-arching score.

For example, when someone becomes unemployed their wellbeing score drops by 0.7 on a scale running from 0 to 10 to measure people’s self-reported satisfaction with life. But if their income rises by 10%, their score would rise by 0.02 points. And because our wellbeing fluctuates over time, the wellbeing outcome is calculated in terms of the change in wellbeing x its duration, or wellbeing years. 

Lockdown and wellbeing

The framework has already been put to good use. In a paper published soon after the UK lockdown was put in place, we used WELLBYs to calculate the optimal time to release the lockdown. By applying a valuation to each outcome that might result from loosening restrictions – for instance, more Covid-19 deaths versus more income and better mental health – we concluded that an end to lockdown around 1st June would be optimal from a wellbeing perspective, all things considered. 

...the wellbeing benefits per pound of expenditure would generally be much higher in rebuilding our social infrastructure than our physical infrastructure.

However, we foresee many uses beyond Covid-19. From the UK Government’s upcoming Spending Review to changes on housing policy, WELLBYs could change the way policies are measured for the better. As a report by the All Party Parliamentary Group on Wellbeing Economics has argued, the wellbeing benefits per pound of expenditure would generally be much higher in rebuilding our social infrastructure than our physical infrastructure.

Areas where wellbeing benefits would result include mental health, wellbeing in schools, further education, and social care of the disabled and the elderly. 

Applying a wellbeing lens to policy-making helps societies move beyond GDP in terms of measuring and achieving progress on what ultimately matters most to most people.

Societies that have started applying this more holistic framework to policy-making—such as New Zealand, which now explicitly focuses its annual budget on improving wellbeing—are well placed to navigate public health crises such as covid-19 that cut across all areas of government.