By Conor Lambe, Economist at Danske Bank
In the past, attempts to measure the quality of life or overall well-being of people often involved using only hard economic data, mainly GDP. Obviously economic factors play an important role in contributing to a person’s well-being, but they are not the only thing that should be considered.
To address this issue and attempt to more accurately estimate well-being in a country, a number of alternative data series have been produced in recent years. The United Nations publishes a World Happiness Report which ranks countries according to happiness. This is scored by looking at economic variables like GDP per capita, alongside other indicators like healthy life expectancy and generosity. The OECD has its Better Life Index which captures, among other things, concepts like income, housing conditions, and work-life balance.
In the UK, the Office for National Statistics now publishes measures of economic well-being and personal well-being. This data extends down to the regions and analysing both sets of numbers allows us to draw some conclusions about the overall quality of life enjoyed by people in Northern Ireland.
From an economic viewpoint, the data does not make for particularly pleasant reading. Gross disposable household income per head in Northern Ireland is not only lower than the UK average, it is the lowest of the twelve regions of the UK. The numbers aren’t much better if we look at median income, which gives a better estimate of the income of a typical household or individual. Median income is also lower than the UK average, and Northern Ireland again ranks bottom of the league table.
On personal well-being, it’s a very different story. Northern Ireland outperforms all the other UK regions on the criteria used to measure this. Of the twelve regions, Northern Ireland has the highest scores for life satisfaction, feeling that the things that people do are worthwhile and happiness, as well as the lowest score for anxiety.
It’s not easy to give any real definitive reason exactly why we score so highly on these measures.
Perhaps the affordability of housing is a factor. The proportion of households in Northern Ireland that own their home, either outright or with a mortgage, is relatively high. Weekly mortgage payments, as well as private rent payments, are also low here.
Or maybe the fact that Northern Ireland has an excellent education system plays a role. The exam results published in August of this year showed that, based on A* - C grades at A Level and GCSE, local students outperformed their peers in England and Wales.
However, the one thing that stands out from all this analysis is the clear disconnect that exists in Northern Ireland between the poor performance with regards to economic well-being and the strong performance on personal-wellbeing. This appears to buck the global trend. Countries which rank highly on the UN’s happiness score, like Norway, Denmark and Iceland, also sit near the top of the global league table of GDP per capita. We need to be careful when interpreting this, as GDP per capita is one of the measures used to estimate the overall happiness score. But it’s not really a surprise that people are generally happier in countries where GDP per person is relatively high.
In Northern Ireland we want to maintain our high levels of personal well-being, but we mustn’t get complacent. We should be aiming to improve our overall quality of life even further. Making some progress on economic well-being seems like the obvious place to start.
This article was published in the News Letter on 10th October 2017