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What can’t money buy? Wellbeing and GDP since 1820

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  • Auke Rijpma

Abstract

This paper provides a overview of developments in wellbeing in the world since 1820 using seven indicators. To this end, a composite indicator is constructed using a latent variable model able to deal well with missing data and measurement error issues. Overall, this composite indicator gives an optimistic, if divergent picture of developments in wellbeing. Wellbeing increased substantially in most regions of the world since at least the early twentieth century. At the same time, the divergence of Western Europe and its offshoots with the rest of the world in the nineteenth century is stronger. Convergence in the past decades, however, is also more pronounced. In more recent decades, low-income countries have made more progress in the composite indicator than in per capita GDP. The composite indicator also shows a segmented relation with income, suggesting diminishing returns to income. Improvements in wellbeing indicators over time exogenous to GDP and country-specific characteristics were an important part of this.

Suggested Citation

  • Auke Rijpma, 2016. "What can’t money buy? Wellbeing and GDP since 1820," Working Papers 0078, Utrecht University, Centre for Global Economic History.
  • Handle: RePEc:ucg:wpaper:0078
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    File URL: http://www.cgeh.nl/sites/default/files/WorkingPapers/cgehwp78_rijpma.pdf
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    Cited by:

    1. Mariateresa Ciommi & Chiara Gigliarano & Stefania Taralli & Francesco M. Chelli, 2017. "The Equitable And Sustainable Well-Being At Local Level: A First Attempt Of Time Series Aggregation," RIEDS - Rivista Italiana di Economia, Demografia e Statistica - The Italian Journal of Economic, Demographic and Statistical Studies, SIEDS Societa' Italiana di Economia Demografia e Statistica, vol. 71(4), pages 51-60, October-D.
    2. Jerry L. Holechek & Hatim M. E. Geli & Mohammed N. Sawalhah & Raul Valdez, 2022. "A Global Assessment: Can Renewable Energy Replace Fossil Fuels by 2050?," Sustainability, MDPI, vol. 14(8), pages 1-22, April.
    3. F. Swen Kuh & Grace S. Chiu & Anton H. Westveld, 2019. "Modeling National Latent Socioeconomic Health and Examination of Policy Effects via Causal Inference," Papers 1911.00512, arXiv.org.
    4. Swen Kuh & Grace S. Chiu & Anton H. Westveld, 2020. "Latent Causal Socioeconomic Health Index," Papers 2009.12217, arXiv.org, revised Oct 2023.

    More about this item

    Keywords

    wellbeing; long-term economic growth; economic history;
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