Multidimensional well-being and regional disparities in Europe

Using data from the OECD Regional Well-Being Index - a set of quality-of-life indicators measured at the sub-national level, we construct a set of composite well-being indices. We analyse the extent to which the choice of five alternative aggregation methods affects the well-being ranking of regions. We find that regional inequality in these composite measures is lower than regional inequality in gross-domestic product (GDP) per capita. For most aggregation methods, the rank correlation across regions appears to be quite high. It is also shown that using alternative indicators instead of GDP per capita would only have a small effect on the set of regions eligible for aid from EU Structural Funds. The exception appears to be an aggregation based on how individual dimensions of welfare relate to average life satisfaction across regions, which would substantially change both the ranking of regions and which regions would receive EU funds.