Alternative Measures of Well-being
Measuring Economic Activity and Illustrating Its Variations
AO2
Syllabus requirement
Introduces broader indicators of development and quality of life, such as the OECD Better Life Index, Happiness Index, and Happy Planet Index.
Assessment objectives
AO2 Application and Analysis
Summary
This topic examines three composite alternatives to GDP for measuring well-being: the OECD Better Life Index (BLI), the World Happiness Report’s Happiness Index, and the Happy Planet Index (HPI). Each index combines multiple non-monetary indicators — such as life satisfaction, health, environment and inequality — to provide a broader view of human welfare and the sustainability of living standards, which matter for policy choices that GDP alone cannot capture.