Beyond GDP and Back: What is the Value-Added by Additional Components of Welfare Measurement?

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Abstract
Recently, building on the highly polarizing Stiglitz report, a growing literature suggests thatstatistical offices and applied researchers explore other aspects of human welfare apart from materialwell-being, such as job security, crime, health, environmental factors and subjective perceptions. To explore the additional information of these indicators, we analyze data on the macro level from the GermanFederal Statistical Office combined with micro level data from the German SOEP (1991-2008) on the personal work situation and subjective feelings concerning several aspects of life. Employing the indicatorssuggested by the Stiglitz Report, we find that much of the variation in many well-being measures canindeed be captured well by the hard economic indicators as used in the literature, especially by GDP andthe unemployment rate. This suggests that the hard indicators are still a reasonable and quite robustgauge of well-being of a country. And yet, we also see that these correlations are far from perfect, thusgiving considerable hope that there is room for a broader statistical reporting.

Keywordes: Stiglitz Commission, Stiglitz Report, Beyond GDP, Welfare Measurement, Life Satisfaction