What Has Happened to the Quality of Life in the Advanced Industrial Nations?
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Book Review What Has Happened to the Quality of Life in the Advanced Industrial Nations? Edward N. Wolff (ed) Edward Elgar: Northampton, MA, 2004, pp. xxxi, 392, index. Comparative Economic Studies (2006) 48, 714–716. doi:10.1057/palgrave.ces.8100156
This book contains 12 highly useful essays, half of which deal with countries other than the United States. They fall into three groups: comparative analyses of composite indices of welfare, studies of various distributional issues, and reviews of standard of living measures for the USA. In an important essay, Lars Osberg and Andrew Sharpe compare composite indices of economic well-being in Canada and the United States. These indices have four components: effective per capita consumption flows (including marketed goods and services, household production, leisure, and other non-marketed goods and services), net accumulation of stocks of productive resources (including tangible capital, various types of human capital, stocks of natural resources, changes in environmental conditions, and net foreign debt), distribution (the incidence and depth of poverty and the inequality of income); and economic security (from dangers of job loss, illness, family breakup, and poverty in old age). For some of these indicators, the dollar costs can be calculated using generally accepted methods – for instance, changes in the stock of human capital (including R & D) or changes in the value of the stock of non-renewable natural resource stocks. For indicators such as inequality and insecurity, however, problems of weighting the subcomponents raise problems which the authors discuss. For the final index, several different weighting schemes are presented to show the sensitivity of the combined index to such subjective judgments. All the variants reveal a considerably slower increase than per capita GDP. The authors’ website presents their basic data so that others can recalculate the indices using different weights or add additional welfare measures. My only regret is that they did not compare their results with other composite indices such as the Rowe-Anielski ‘Genuine Progress Index’ or the Miringoff–Miringoff ‘Social Health Index.’ Richard H. Steckel argues that the average height of the native-born population is a useful proxy measurement for the standard of living. He presents data for various countries both at a single point in time and over the
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last few centuries. In his theoretical discussion he emphasizes how such an indicator is related both to average nourishment, life expectancy at birth, and the distribution of income, but he only includes per capita GDP in his actual regressions. The average height proxy for the standard of living seems convincing, especially where economic indicators are lacking, though the author does not discuss its advantages over other indicators of health such as mortality and morbidity, health personnel, or hospital beds per capita. Among the essays on distributional issues, Timothy M. Smeeding and Lee Rai
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