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Cited by 2,555Psychological Well-being and Life SatisfactionQuality of Life MeasurementSustainable Development and Environmental Policy

Beyond money: toward an economy of well-being

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Diener, Ed, Seligman, Martin E.P.·2004·Psychological Science in the Public Interest
DOI 10.1111/j.0963-7214.2004.00501001.x
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Abstract

Policy decisions at the organizational, corporate, and governmental levels should be more heavily influenced by issues related to well-being—people's evaluations and feelings about their lives. Domestic policy currently focuses heavily on economic outcomes, although economic indicators omit, and even mislead about, much of what society values. We show that economic indicators have many shortcomings, and that measures of well-being point to important conclusions that are not apparent from economic indicators alone. For example, although economic output has risen steeply over the past decades, there has been no rise in life satisfaction during this period, and there has been a substantial increase in depression and distrust. We argue that economic indicators were extremely important in the early stages of economic development, when the fulfillment of basic needs was the main issue. As societies grow wealthy, however, differences in well-being are less frequently due to income, and are more frequently due to factors such as social relationships and enjoyment at work. Important noneconomic predictors of the average levels of well-being of societies include social capital, democratic governance, and human rights. In the workplace, noneconomic factors influence work satisfaction and profitability. It is therefore important that organizations, as well as nations, monitor the well-being of workers, and take steps to improve it. Assessing the well-being of individuals with mental disorders casts light on policy problems that do not emerge from economic indicators. Mental disorders cause widespread suffering, and their impact is growing, especially in relation to the influence of medical disorders, which is declining. Although many studies now show that the suffering due to mental disorders can be alleviated by treatment, a large proportion of persons with mental disorders go untreated. Thus, a policy imperative is to offer treatment to more people with mental disorders, and more assistance to their caregivers. Supportive, positive social relationships are necessary for well-being. There are data suggesting that well-being leads to good social relationships and does not merely follow from them. In addition, experimental evidence indicates that people suffer when they are ostracized from groups or have poor relationships in groups. The fact that strong social relationships are critical to well-being has many policy implications. For instance, corporations should carefully consider relocating employees because doing so can sever friendships and therefore be detrimental to well-being. Desirable outcomes, even economic ones, are often caused by well-being rather than the other way around. People high in well-being later earn higher incomes and perform better at work than people who report low well-being. Happy workers are better organizational citizens, meaning that they help other people at work in various ways. Furthermore, people high in well-being seem to have better social relationships than people low in well-being. For example, they are more likely to get married, stay married, and have rewarding marriages. Finally, well-being is related to health and longevity, although the pathways linking these variables are far from fully understood. Thus, well-being not only is valuable because it feels good, but also is valuable because it has beneficial consequences. This fact makes national and corporate monitoring of well-being imperative. In order to facilitate the use of well-being outcomes in shaping policy, we propose creating a national well-being index that systematically assesses key well-being variables for representative samples of the population. Variables measured should include positive and negative emotions, engagement, purpose and meaning, optimism and trust, and the broad construct of life satisfaction. A major problem with using current findings on well-being to guide policy is that they derive from diverse and incommensurable measures of different concepts, in a haphazard mix of respondents. Thus, current findings provide an interesting sample of policy-related findings, but are not strong enough to serve as the basis of policy. Periodic, systematic assessment of well-being will offer policymakers a much stronger set of findings to use in making policy decisions.

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  • Subjective well-being can offer a more holistic measure of how well-off households are compared to monetized measures such as consumption, income, or savings.

    “a person's subjective well-being (one's perception of well-being measured as the response to questions regarding, for example, their level of happiness and satisfaction) can offer a more holistic measure of how well-off households are compared to that which is possible when only assessing monetized measures such as consumption, income, or savings (Diener and Seligman 2004).”

    From Explaining the persistence of low income and environmentally degrading land uses in the Brazilian Amazon (2017) · cites this paper as Diener and Seligman 2004

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Cited by

Sorted by citations

Authors
Diener, E., & Seligman, M. E. P.
Affiliations
  • University of Illinois Urbana-Champaign (US)
  • University of Pennsylvania (US)
Corresponding author
Diener, Ed
ORCID
Venue
Psychological Science in the Public Interest
Publisher
SAGE Publications
Published
2004-07
Volume
5
Issue
1
Pages
1-31
ISSN
  • 1539-6053 (ISSN-L)
  • 1529-1006
DOI
10.1111/j.0963-7214.2004.00501001.x
OpenAlex
W2164513234
Cited by
2,555
References
29
Citations by year
2026: 112 · 2025: 176 · 2024: 136 · 2023: 137 · 2022: 135 · 2021: 158 · 2020: 121 · 2019: 148 · 2018: 111 · 2017: 129 · 2016: 112 · 2015: 134 · 2014: 133 · 2013: 133 · 2012: 128
FWCI
67.33
Type
journal article
Language
en
Open access
Licence
journals.sagepub.com/page/policies/text-and-data-mining-license (tdm)
Locations
  • Gothic.net (publishedVersion)
  • PubMed (publishedVersion)
Topics
  • Social Sciences › Psychology › Social Psychology › Psychological Well-being and Life Satisfaction
  • Social Sciences › Sociology and Political Science › Quality of Life Measurement
  • Physical Sciences › Environmental Science › Management, Monitoring, Policy and Law › Sustainable Development and Environmental Policy
Keywords
well-being, economic indicators, life satisfaction, depression, social capital, democratic governance, human rights, mental illness, interpersonal relationships, employee well-being, organizational citizenship behavior, ostracism, economic growth, income and happiness, well-being policy, psychiatric treatment, caregiver support, health and happiness

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