Multidimensional composite indicators of well-being: Applications in economic history

Abstract

Economists and social scientists have widely contributed to the so-called “Beyond GDP” debate—the view that current measures of economic growth are inadequate to measure well-being and multidimensional indicators. While economic history has not been prominent in these debates, multidimensional indicators have captured the interest of economic historians, with both theoretical and empirical contributions. In this contribution, we examine the areas of consensus and debate in economic history. A comprehensive literature review shows a lack of consensus on how to use multidimensional indicators and that they face substantial critiques. We use two case-studies (a long-term series for the Netherlands and one on the basis of the CLIO-INFRA panel dataset) to illustrate how common findings emerge in the literature and empirical exercises despite methodological differences. We argue that debates on the relation between economic growth and well-being in the long-run using these indicators can not only contribute to many founding questions in economic history—though greater precision and transparency in our assumptions about well-being measurement are necessary—but also to better understand present-day challenges such as how to better pursue growth in well-being and not merely in GDP.