The aim of this thesis is to explore the most appropriate means of measuring individual wellbeing
for public policy. The thesis will begin by asking exactly what is meant by well-being and
giving a brief overview of the main philosophical accounts of well-being, summarising the
variations within each account and considering how well-being can be measured from that
perspective. Chapter Three uses analysis of the British Household Panel Survey (BHPS) to
explore the differences between the well-being measures available within that dataset. This
shows that, although in many cases the choice between different subjective well-being (SWB)
measures appears to make minimal difference, there is wide variation between household
income and subjective well-being measures and also some important cases where subjective
measures differ. This implies that the choice of well-being measure will have important
implications for policy making.
To aid judgement between different well-being measures a list of criteria for an ideal measure of
well-being to be used for public policy are set out in Chapter Four. Chapter Five asks how the
various measures of well-being fare according to these criteria, finding that subjective measures
perform at least as well, if not better, than existing measures of well-being drawn from neoclassical
economic theory.
The next three chapters use evidence from the SWB literature and additional analysis of the
BHPS to asks whether our current understanding of the determinants of SWB is sufficient to
support policy recommendations. Chapter six focuses on the relationship between income and
SWB, specifically on evidence for inefficiencies arising from adaptation to income and
reference income effects. Chapter seven looks at the relationship between SWB and social
capital and considers the extent to which the relationship between talking to neighbours and
SWB can be thought of as causal through the use of Instrumental Variable techniques. Lastly,
chapter eight considers the role of SWB measures within microeconomic evaluation. The final
chapter summarises the advantages and potential hurdles for the use of SWB indicators of wellbeing
within public policy, concluding with recommendations for extending this work, both in
relation to public policy and academic research
