The WELLBY: a new measure of social value and progress

The paper addresses how to measure social value and progress in a way that is comprehensible, policy-relevant, and goes beyond GDP and standard willingness-to-pay metrics. The authors introduce the WELLBY (Wellbeing-Year), defined as a 1-point change in self-reported life satisfaction (0–10 scale) for one person for one year, as a core unit for assessing benefits of policies and activities. They motivate the need for a simple, one-dimensional, transparent, and data-rich measure to inform cost-effectiveness and cost–benefit analyses across diverse interventions, noting widespread adoption of life-satisfaction questions in surveys and growing policy interest (e.g., HM Treasury UK, New Zealand Treasury). The introduction situates the WELLBY in the context of governments, employers, and businesses prioritizing wellbeing, highlights advantages of a wellbeing orientation for political and economic outcomes, and previews applications: ex-ante appraisals, ex-post evaluations feeding social value banks, and tracking social progress beyond GDP.

The paper draws on extensive literature demonstrating that life satisfaction (LS) is a reliable, valid, sensitive, and discriminant measure of subjective wellbeing. Empirical studies link LS to health and longevity, productivity, voting behavior, and other life outcomes. The authors reference evidence on adaptation, misprediction, status concerns, spillovers, and procedural utility as phenomena captured by LS. They review psychometric support for LS (e.g., SWLS, Cantril ladder) and convergence across measures, with cautions about intra-person variability, priming, item-order effects, survey mode and framing effects, and contextual sensitivity (e.g., weather). They discuss debates about cardinality (with supportive arguments but no definitive proof), and note that LS reflects evaluative narratives rather than pure experienced utility. The literature also highlights cultural and personality/value moderators, motivating the importance of causal designs (e.g., RCTs, quasi-experiments) and large representative surveys for policy monitoring. The authors also cite work on experiential valuation for short-run activities as a complement to WELLBYs, and acknowledge the evidence base is concentrated in WEIRD countries, calling for broader contexts.

Definition and measurement: A WELLBY is one point of self-reported life satisfaction on a 0–10 Likert scale for one person for one year. LS is typically collected annually via large-scale surveys (e.g., ONS, APS, Gallup World Poll). For policy analysis, effects should be causal (ideally from trials or robust quasi-experiments) and compared to a control/status quo. Different versions include crude, age-standardised, expected lifetime, and inequality measures of WELLBYs. Policy appraisal frameworks: - Cost-effectiveness analysis (CEA): Social Unit Cost (SUC) = discounted WELLBY gains divided by discounted net public costs across individuals and years. Analysts in the UK typically use financial discount rate r ≈ 3.5% and a WELLBY (benefit) discount rate p ≈ 1.5% (aligned with health). Policies are ranked by SUC; implement in order until budget exhaustion. The marginal SUC yields the shadow price of wellbeing. - Cost–benefit analysis (CBA): Compute net present social value (NPSV) by monetising WELLBY benefits alongside other monetary benefits (willingness-to-pay) and subtracting discounted costs. Alternatively, compute benefit–cost ratios. Monetisation of 1.0 WELLBY (UK, 2019 prices): lower bound GBP 10,000 (by pegging to QALY valued at GBP 70,000 and mapping full health ≈ LS 8, indifference to life/death ≈ LS 1), upper bound GBP 16,000 (from marginal rate of substitution between LS and income; log income coefficient 1.96 with average earnings GBP 30,673). Proposed central value: GBP 13,000. Worked example (policy X): LS effect 0.15 for one year; cost GBP 500/person/year. Monetised benefit = 0.15 × 13,000 = GBP 1,950; net benefit = GBP 1,450; BCR = 3.9; SUC = 500 / 0.15 = GBP 3,333. Youth traineeship programme (five-year appraisal; 50,000 NEET 17–20-year-olds; 50% take-up; training 1 day/week for 52 weeks): Components: volunteering (+0.20 WELLBYs in year 1), socio-emotional skills (+0.10 WELLBYs in years 1–5), employment (+0.46 WELLBYs in years 2–5), plus income from employment GBP 18,000 in years 2–5. Costs: GBP 10,000 per trainee in year 1; one-off implementation cost GBP 100,000 in year 0. Using discounting and converting income to WELLBYs via log-income coefficient (0.4) in a quasi-experimental estimate, CEA yields SUC = GBP 2,957, indicating cost-effectiveness relative to a GBP 13,000 WELLBY valuation. Ex-post evaluation (ideally RCT) is recommended to validate assumed coefficients and costs. Social value banks: The paper documents methodology and governance for WELLBY coefficient repositories to support appraisals: the Open Social Value Bank (Denmark) aligning WELLBY value to VOLY→QALY conversion; Canada’s Database of Happiness Coefficients (independent curation, transparent, revisable, distribution-aware); the US Social Value Bank (Ohio University) deriving WELLBY monetary figures from CDC QALY estimates and coefficients from MIDUS data. Measuring social progress beyond GDP: Expected lifetime WELLBYs at birth: W_jt = (LS_jt − LS_0) × Y_jt, where LS_0 is the indifference zero-point (recommended 2 for 2011–2021; UK guidance sometimes uses 1 for behaviorally-informed analyses). LS from Gallup World Poll; life expectancy from World Bank. The metric reflects total lifetime LS points for a newborn if current conditions persisted. The authors compare global population-weighted growth in expected lifetime WELLBYs with GDP per capita growth (excluding China and India due to sampling distortions during lockdowns).

- The WELLBY offers a simple, one-dimensional, survey-based unit to quantify social value, integrating quality and length of life, and is now included in UK HM Treasury appraisal guidance and adopted in practice in several countries. - Integration in appraisal: WELLBYs fit within CEA (as crude WELLBYs) and CBA (monetised). UK discounting uses r ≈ 3.5% for costs and p ≈ 1.5% for WELLBY benefits. 1.0 WELLBY is valued between GBP 10,000 and 16,000, central GBP 13,000 (2019 prices). - Worked example: A 0.15 LS gain for one year at GBP 500 cost yields BCR 3.9 and SUC GBP 3,333, illustrating straightforward use in CEA/CBA. - Youth traineeship programme: With volunteering, socio-emotional skills, and employment effects, SUC = GBP 2,957, indicating strong cost-effectiveness relative to the GBP 13,000 WELLBY value; thus, it warrants implementation subject to ex-post evaluation. - Social welfare magnitudes: A typical UK resident generates about 533 lifetime WELLBYs (mean LS surplus 6.5 × life expectancy 82). With 67 million residents, the UK generated ~35.7 billion WELLBYs in 2022. - Social value banks: New repositories in Denmark (OSVB), Canada (DOHC), and the US (Ohio University) are assembling and curating WELLBY coefficients and monetary values to standardize and scale wellbeing appraisal. - Beyond GDP: Expected lifetime WELLBYs vary substantially across countries (e.g., Finland ~482.5 at the 2020 peak among top performers; Lebanon 13.4 in 2021 amid crisis). Developed Western countries experienced stagnation or declines in expected lifetime WELLBYs in 2011–2021. Global comparisons of growth show positive but imperfect correlation between GDP and WELLBY growth; e.g., in 2021 GDP per-capita rebounded strongly (8.6%) while expected lifetime WELLBYs per-capita barely grew (0.3%), indicating distinct information content. - Policy relevance: WELLBYs capture spillovers and externalities (e.g., pollution) more directly than WTP-based methods, and their simplicity enhances transparency and communication with decision-makers and the public.

The paper demonstrates that a single, comprehensible unit (the WELLBY) can anchor both ex-ante and ex-post policy analysis, making trade-offs transparent and enabling prioritization by cost-effectiveness or net social value. By monetising WELLBYs or using them directly in CEA, decision-makers can compare heterogeneous interventions on a common scale, incorporate wellbeing spillovers often missed by WTP methods, and identify a shadow price of wellbeing. The traineeship case shows how multi-component social programs can be valued holistically, elevating psychological and social benefits alongside income. The construction of social value banks institutionalizes evidence, reduces appraisal costs, and supports iterative learning across contexts. Using expected lifetime WELLBYs to track social progress reveals divergences from GDP dynamics, underscoring the need for complementary metrics that reflect lived quality and longevity. Overall, the findings support the central hypothesis that the WELLBY can serve as a practical, policy-embedded measure of social value and progress that improves on GDP- and income-centric appraisals.

The authors introduce and formalize the WELLBY as a practical unit for valuing social interventions and tracking societal progress. They show how to implement WELLBYs within standard appraisal frameworks (CEA, CBA), present valuation bounds and discounting conventions, and illustrate use through a youth traineeship example with strong cost-effectiveness. They document emerging social value banks in multiple countries to curate coefficients and monetary values, facilitating broader adoption. As a contribution beyond GDP, expected lifetime WELLBYs offer a population-level progress metric that decomposes into life satisfaction and life expectancy, revealing trends missed by economic aggregates. Future work should: expand evidence beyond WEIRD contexts; refine zero-point, cardinality, and discounting assumptions; strengthen causal identification in ex-post evaluations; enhance representativeness and high-frequency monitoring; integrate experiential valuation for short-run activities; and develop principled approaches to incorporate rights, environmental and non-human values within or alongside WELLBY-based appraisals. Scaling WELLBY use also requires political buy-in, public education, and embedding wellbeing metrics in official statistics and routine decision processes.

- Measurement and survey issues: intra-person variability in LS necessitates large, preferably longitudinal samples; susceptibility to item-ordering, priming, survey mode and interviewer effects; sensitivity to incidental context (e.g., weather); challenges in representativeness and response rates for monitoring. - Conceptual challenges: LS reflects evaluative narratives rather than pure experienced utility; uncertainty about strict cardinality; heterogeneity across cultures, personalities, and values complicates cross-country comparisons; age patterns and mortality selectivity can bias averages; population size neutrality not addressed in the simple average metric. - Scope limitations: WELLBYs are coarse for small, short-term, or one-off activities; complement with experiential valuation for such cases. Small interventions on small groups may be underpowered for precise estimates. - Ethical and normative boundaries: consequentialist focus may underweight inalienable rights or non-human environmental values unless assigned WELLBY equivalents; valuation and inclusion of future generations depend on discounting choices and available ecological impact estimates. - Evidence base: currently concentrated in WEIRD countries; generalizability needs testing and extension. - Implementation hurdles: countries lacking official wellbeing statistics face adoption barriers; institutional change and public education are needed; standardization (e.g., WELLBY monetary value, discount rates) varies across jurisdictions (e.g., UK vs US).