Sunday

22nd May 2022

Analysis

Quality of life or 'damned lies and statistics'?

  • GDP is the main basis for tax and spending plans (Photo: Jorge Franganillo)

“There are lies, damned lies, and statistics,” is the oft-misquoted and possibly apocryphal remark attributed to former UK prime minister Benjamin Disraeli.

He might have been talking about the magnum opus published on Monday (1 June) by Eurostat, the EU’s statistical agency. Eurostat’s ‘Quality of Life’ report is just over 250 pages of statistical analysis put together by the agency’s team of statisticians in Luxembourg, and throws up a mixture of some obvious and distinctly quirky findings.

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Observers of European politics might think that the only statistics their leaders are interested in are GDP and inflation. Economic output, expenditure, income, and prices are the most tried and tested ways to measure the state of a country's economy.

Bean-counters across the 28 country bloc take data from thousands of businesses across various sectors of the economy and government spending in a bid to find the overall figures. It’s not as precise a science as politicians make it out to be when they grandly (or meekly) read out the GDP results every few months.

Among the main charges against GDP are that it doesn’t account for the distribution of growth. Despite Europe's double-dip recession, national income in most countries has more than doubled over the past thirty years. But while the wealthiest households have seen their share of national income increase rapidly, average households have seen little or no income gains.

Between 1980 and 2010 the average middle class family in the United States saw their disposable income in real terms go up by a mere 1 percent, and a similar pattern can be seen in the EU, particularly western Europe.

Despite its shortcomings, GDP is the main basis on which governments decide their tax and spending plans and is used internationally by the OECD, IMF, and the World Bank to compare the performance of different economies.

The EU also uses economic output as a basis for determining different countries' contributions to the EU budget. But while GDP is unlikely to be knocked off its perch it is becoming an increasingly blunt tool when it comes to measuring economic and societal prosperity.

Policy makers are becoming increasingly keen on complementing these traditional indicators with other statistics on 'quality of life'. Meanwhile, an increasing amount of academic literature, such as the ‘Spirit Level’ by sociologists Kate Pickett and Richard Wilkinson, contends that 'socially cohesive' countries are more likely to have lower levels of crime, substance and alcohol addiction, and higher levels of social mobility.

As a result, the UN developed a Human Development Index to assess countries using measurements for GDP, health and education. The OECD has its Global Project on Measuring the Progress of Societies, the French

government set up its Commission on the Measurement of Economic Performance and Social Progress headed by Joseph Stiglitz, and the EU launched its ‘GDP and Beyond’ white paper in 2009.

The ‘Quality of Life’ report is based on data collected in 2013 on a raft of policy issues ranging from personal health, education and living conditions, to finances, relationships, employment and governance.

Overall, Sweden and Finland were tied with non-EU nations Switzerland and Iceland as the ‘happiest’ countries, according to the survey, with the highest life satisfaction scores. They reported an average ‘satisfaction’ score of 8 out of 10, compared to an EU-average of 7.1.

Meanwhile, Europeans appear to be happier with their relationships than with their finances. Unsurprisingly, it is the wealthier Nordic countries - Denmark, Sweden and Finland - which have the highest levels of satisfaction with their finances, while the Irish, Danes and Austrians have the most fulfilling love lives. Irish people also had the highest perception of their personal health. Not content with their happy private lives, Finns and Danes were the happiest about their living conditions, according to the data.

Conversely, Bulgaria and Romania, two of the EU’s poorest countries, tended to report at the low end of a number of the indicators.

“Citizens care about their quality of life so there is a clear added-value to complementing GDP data with statistics that can give a better picture of what people value in their daily lives,” argues Eurostat chief, Walter Radermacher, adding that the new data “can help us deliver better tailored policies to improve the overall life satisfaction of Europeans."

But getting accurate data to assess quality of life is not as straightforward as economic production, while opinion poll-confounding election results in the UK and Israel suggest that people don’t always tell the truth to surveys.

As a result, judging how valuable the ‘Quality of Life’ report is for policymakers is difficult. Legislation on working hours or paid leave, and investment in public parks, schools and healthcare might all be ways to improve quality of life, but the impact of much public policy on life satisfaction is more intangible.

However, it appears as though EU policymakers are responding to public demand. More than two thirds of Europeans wanted political leaders to give equal weight to indicators on social and environmental policy, according to, yes, a Eurobarometer survey in 2008. Enough to make Disraeli re-consider? Quite possibly.

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