Topic 1: How do we define well-being? Moving from individual to social to inter-generational well-being

What is our conception of individual well-being?  How do we aggregate this into social well-being, and what ethical framework is shaping our formula?  In addition to considering individual well-being across society today, how do we value the well-being of different generations?

In the strand of Institutional theory that originates from the discipline of organizational theory, W.R. Scott (2005) and many others speak of cultural-cognitive institutions besides the commonly identified coercive/regulative and normative institutions. These cultural-cognitve insitutions are mental models and "taken-for-granted" behaviours and frames. In the hierarchy of institutions of differnt types, these sultural institutions are the msot difficult to change due to their sever path dependence arising out of traditional value and belief systems. Douglas North (1992) in “The New institutional economics and development” drawn from John R. Commons lecture given at the American Economic Association meetings argued that cognitive models or belief systems have a significant role to play in institutional change.

Against this background, the notion of "well-being" is understood differently in different cultures and even across different generations. While examples abound from the former with notions such as "celebration of poverty" in many parts of rural India, the inter-temporal variatins are also worth noting. The concept of "well-being" as visualized in the mental frame and model by our earlier generations were probably more sustainable from a bio-physical point of view compared to ours and the same would probably be true for the future generations. There could also well be some minimum threshold level of need or well-being beyond which the perosn's mental model says that he can not physically survive. This aspect is captured in the second reading put forward by the Princeton group - in the concept of "attitudes." Just because of the measurement issues involved with these kind of notions, economics tend to "drop" these variables; only a reflexive science can use "interpretive" approached to understand these concepts. I, therefore, like the "abduction" approach (a mid-range theory) that Prof. Turner talked about a few weeks ago. There is not as much poin tin measuring this than thinking of ways, approaches, methods and even instituional frameworks to alter the current mental model of people from being a "consumerist" to a "humanist".  This shift in value would require real scholarship and leadership.

We understand that the chapter presented by Dasgupta offers one possible framework for sustainable development. Although this is an economic framework, it takes into account social and natural systems.

However, there are some important questions that remain unanswered or are partially addressed: What is well-being? And, how much of this framework is related to well-being?

We think it is still difficult to understand the relationship among services production and goods, with well-being, as other many factors could influence this relationship.

As the well- being concept is complex and sometimes conceived as partially subjective, there are many definitions (and metrics) of it. Some institutions offer metrics that partially addressed well-being. For example, the Human development index from the UNPD (United Nations Program for Development), take into account three factors: 1) long and healthy life, 2) education, and 3) life level (measured as per capita GDP). Nevertheless, we are aware that the wealth and services of a country is not proportionally distributed among the population.

We consider that the Maslow well-being pyramid presented by Princeton is very clear and deal, in a more detailed way, with the difficult (and almost never considered) aspects of this term (love/belonging, esteem and self actualization). If well-being is defined with the Maslow pyramid axes, we can see that the United Nations Organization and international programs related with sustainability consider well-being only partially. Apparently Dasgupta manage the two first levels (physiological and safety). This leads us to the question: How to measure the other well-being levels?

An alternative to complement the current way to measure well-being could be through opinion polls to define the Human happiness Index. Even when this term apparently is not directly related with natural capital, it does have a more direct relation with cultural aspects. So, probably, Satisfaction with life index (Adrian White), and/or the gross national happiness (GNH by Jigme Singye Wangchuck,) could complement the current methodology to measure well-being.

Finally we think inequity indices are other candidate that has to be taken into account in the definition of well-being. How can we unravel or work out the relation between unfairness and the natural and socio-cultural axes in the sustainable development?

Previously Molly O'Connor wrote:

What is our conception of individual well-being?  How do we aggregate this into social well-being, and what ethical framework is shaping our formula?  In addition to considering individual well-being across society today, how do we value the well-being of different generations?

In the inclusive wealth/non-declining human well-being model, it seems problematic to consider well being to be the utility of just consumption.  However, consumption includes all goods and services, including environmental services, experience goods, etc…

It seems problematic and controversial that social well-being can be additive of all individuals’ well-being.  This is an ethical issue; the inclusive wealth concept does not seem to directly take inequality into account.  Do the G functions of individual utilities in Dasgupta’s model fully bring equality into the conception of social utility?  Is this alleviated by the concavity of the social utility frontier?  Is it possible that in a feudal system where there might be gain from concentrating the wealth, that additive individual utilities do not reflect social utility?

Is it the case that the social efficiency frontier will always be concave?  It is clear that as long as each individual has a concave utility function, then the social efficiency frontier will be concave, but is a convex (exponential) or partially-convex (sigmoidal) individual utility function possible?  A sigmoidal utility function seems particularly plausible where one would need a certain amount of capital before utility would start rising steeply with increasing capital.  An individual convex or partially-convex utility function seems to undermine the assumption of a concave social utility frontier.

In considering inter-generational well being, is discounting appropriate in the context of sustainability?  While the economics viewpoint that individuals’ choices and behaviors demonstrate that people have a positive rate of time preference makes sense, does this carry over when considering sustainability?  Dasgupta does point out that moral philosophers consider discounting to be unethical.  However, a discount rate of zero does not seem appropriate: to say that what happens ten million years from now has the same value as what happens now seems ludicrous given the less than 1 probability that human survival will last that long.  There seems, thus to be two salient questions:  (1) Should discount rates be employed at all? and (2) Are discount rates that are employed in these calculations too high?