Is the Grass Always Greener on the Other Side of the fence? Composite Index of Well-Being Taking into Account the Local Relative Appreciations in Better Life Index

The multidimensional measures of well-being, such as the OECD Better Life Index (BLI), are receiving considerable attention. We introduce a composite index that, departing from the current practice, accounts for societal relative appreciation for the considered dimensions. We apply our methodology to the BLI using the data on preferences gathered from the OECD website. Our analysis signals pervasive differences in the country-level performances that cannot be compensated through differences in local preferences. Furthermore, individual preferences exacerbate multidimensional inequality between countries. Hence, we conjecture that better performing countries offer a policy mix better tailored to fit citizens’ preferences.