How is Luxembourg's quality of life calculated?

It’s interesting how often a country’s Gross Domestic Product or GDP figure, is waved as a quality of life or ‘well-being’ flag for its citizens, but is it the only way to measure how contented with life a country’s population is? As the old saying goes, “money can’t buy happiness”, or can it? How then does Luxembourg fare in a quality of life league table of countries?

According to Luxembourg’s CES, Conseil Économique et Social (Economic and Social Council) there are many ways to measure a population’s quality of life and GDP should not really be taken into consideration when measuring well-being as its aim and design, is used to calculate and compare the production of goods and services. That said, a ‘side effect’ result is bound to make people think that the higher the GDP is, the more happy people are and in that respect Luxembourg is extremely content.

The GDP Well-being Project

With that in mind, the CES and the CSDD, Conseil Supérieur pour un Développement Durable (Higher Council for Sustainable Development) back in May 2011 began working together to create a comprehensive report.

The two organisations already released an initial technical report entitled “GDP Well-being Project” in which it states; “It should be noted that the well-being of a nation rests, among other things, on different pillars, these being the economy, the social pillar, the environment, culture, governance, global partnership, etc.”

The final outcome of the study should be available next year and the next step will be to prepare a report on the progress of Luxembourg society, producing figures in accordance with the reality of living standards and welfare for Luxembourg inhabitants, particularly through the prism of income distribution.

The OECD "Better Life Index"

But what is the point of the report if you don’t have other countries to compare it against?

The OECD, Organisation for Economic Co-operation and Development, somewhat flies in the face of Luxembourg’s CES and CSDD as it produces “Better Life Index” reports for its 34 member countries based on, you guessed it, GDP. However the reports do go further and break down GDP into 11 factors including housing, income, life-satisfaction, work-life balance, education and health.

On a rather flashy website Luxembourg can be compared instantly against other countries in very easy to follow “flower petal” graphics. The results are instant and extremely interesting. Click on “Income” as your most important factor and Luxembourg shoots to the top. But place “Governance” as you priority and the Grand Duchy dramatically drops to twentieth position. The country doesn’t fare too well when it comes to education either.

It must be said though, that the website is designed as a “mix and match” site. i.e. choose your priorities and the site displays which country is best matched to you.

Without selecting any priorities in the Better Life Index, Luxembourg stands in eleventh place behind Australia at the top then Canada, all Scandinavian countries, Switzerland, USA and just behind Netherlands. However the Grand Duchy is ahead of Iceland and United Kingdom.

Therefore this does echo CES and CSDD by proving that wealth and income and global GDP figures are not a deciding factor in a population’s well-being. Can money buy happiness? Apparently not.