Experimenting with a strong dual necessity approach to social progress

The assessment of social progress has long been debated, with two prominent conceptions emerging: subjective, focusing on individual attitudes and experiences, and objective, emphasizing external standards and indicators. Existing indices often favor one conception or assume high substitutability between subjective and objective components. This paper challenges this by proposing a 'strong dual necessity' approach, asserting that both subjective and objective aspects are jointly necessary for social progress and that neither can fully compensate for the other. This necessitates a low degree of substitution between the components in any operationalized index. This research builds on previous work by utilizing the CES function, a tool allowing for adjustable substitution levels, to compare social progress rankings under varying degrees of substitution. The hypothesis is that low substitution will lead to substantially different rankings compared to approaches with high substitution or those relying on only subjective or objective measures. The study aims to empirically demonstrate the significance of this low substitution approach and to validate the strong dual necessity conception of social progress.

The paper reviews existing literature on social progress indices, highlighting the tension between subjective and objective conceptions. It discusses various indices such as the UN Human Development Index (HDI), which lacks a subjective component, the World Happiness Ranking (WHR), which relies solely on subjective data, and the OECD Better Life Index (BLI), which combines both with significant substitutability. The authors note that these indices often implicitly prioritize one aspect or permit considerable compensation between the two. Philosophical traditions supporting both subjective (utilitarianism, welfarism) and objective (basic needs, capabilities, sustainability) conceptions are explored. The authors introduce the 'strong dual necessity' conception, which asserts that both subjective and objective aspects are independently justifiable and only jointly sufficient for social progress, implying low compensability between the two.

To operationalize the strong dual necessity concept, the authors employ the constant elasticity of substitution (CES) function. This function allows for varying degrees of substitution between two components, ranging from zero (no substitution) to infinity (perfect substitution). The study utilizes two well-established indices: the World Happiness Report (WHR) representing the subjective component, and the Human Development Index (HDI) and the Sustainable Development Goals Index (SDGI) representing the objective component. Data from 141 countries are used, with the indices standardized before applying the CES function. The authors conduct experiments using different combinations of indices and varying elasticity of substitution levels (σ = 0.1 for low substitution and σ = 3 for high substitution). Rankings are compared under these different conditions – low substitution, high substitution, and using individual components (HDI or WHR alone) – to evaluate the impact of the low substitution approach on country rankings. The rankings are analyzed to identify countries where the low substitution approach produces significant deviations compared to the high substitution approach or the rankings based on individual components. Kendall's Tau is used to assess rank correlation between different indices and ranking methods.

The study finds that using both subjective and objective measures, rather than relying on a single component, significantly impacts social progress rankings. Furthermore, the degree of substitution between the components significantly alters the rankings. A low substitution approach, using the CES function with σ = 0.1, leads to different rankings compared to a high substitution approach (σ = 3) and to using single indices. The differences are particularly pronounced for countries in the middle range of initial rankings. Analyzing the WHR and HDI, the authors observe that the correlation between their rankings is weak in the second and third quartiles, providing empirical support for the low substitution approach. Using the CES function with low substitution, the rankings deviate significantly from the HDI ranking, especially for mid-ranking countries. Similar results are obtained when using the SDG index as the objective component, again showing significant deviations in mid-range countries. The authors illustrate specific examples (Hong Kong, Turkey, Sri Lanka, Saudi Arabia, Guatemala) to highlight how the low substitution approach exposes anomalies or imbalances between subjective well-being and objective indicators, revealing previously unseen weaknesses in social progress. In Tables 3 and 4, the authors highlight countries with the largest differences in rankings across the different approaches, illustrating the impact of low substitution in identifying these anomalies.

The findings support the hypothesis that a strong dual necessity conception, operationalized through a low substitution approach, matters empirically. The significant differences in rankings resulting from the low substitution approach highlight the limitations of indices that implicitly assume high substitutability between subjective and objective aspects of social progress. This approach enhances the validity of social progress measurement by acknowledging the independent significance of both subjective and objective considerations. By employing the CES function, the research provides a practical tool to implement and test various levels of dual necessity, allowing for flexibility in adjusting the weight given to subjective versus objective elements. The identified anomalies highlight the risk of neglecting either subjective or objective factors when evaluating social progress. This has important implications for policy-making, emphasizing the need for balanced policies that address both subjective well-being and objective standards.

This paper successfully establishes the CES function as a valuable tool for operationalizing the strong dual necessity conception of social progress. The empirical findings demonstrate the significance of a low substitution approach, altering social progress rankings, especially for countries with imbalances between subjective and objective indicators. The research highlights the importance of considering both subjective well-being and objective standards, urging policymakers to pursue balanced progress. Future research could explore the application of this approach to other contexts (cities, neighborhoods, workplaces) and investigate alternative subjective and objective indices. Further validation through nomological testing, examining the predictive power of the low substitution approach, would also be valuable.

The study relies on readily available and widely used indices, which might not fully capture the complexities of subjective and objective dimensions of social progress. The choice of specific elasticity values (σ = 0.1 and σ = 3) is somewhat arbitrary, though sensitivity analyses could further explore the robustness of results across different elasticity levels. The assumption of comparability between subjective and objective measures, even after standardization, remains a potential limitation, although this is a common challenge in constructing composite social progress indices. Finally, the low-substitution ranking alone doesn't directly pinpoint which component drives a country's lower ranking, requiring further analysis of the constituent indices.