January 15, 2019

Wellbeing – the psychological view

Local and central government are emerging as important actors in defining and measuring wellbeing concepts. The current discussion around wellbeing is being driven by the public sector and is viewed through the lens of budgets, capitals, and indicators. A move away from the over-reliance on GDP as an assessment of a nation’s health is welcomed, as is a move towards a broader dashboard of indicators reflecting concerns around the distribution of wellbeing in communities.

While wellbeing is a recent addition to the economic dialogue spurred by the OECD 2009 Commission on the Measurement of Economic Performance and Social Progress, it has been a core concept of positive psychology since the 1980’s – multifaceted and multidimensional, and with a vast body of research.

Two main philosophical viewpoints underpin the categorisation of wellbeing constructs in psychology. Subjective wellbeing has a hedonic foundation, being based on feelings. This type of wellbeing concerns itself with an individual’s global evaluation of their life satisfaction or evaluative wellbeing, and affect balance or experiential wellbeing, which is the balance between positive affect (experiences of pleasure) and negative affect (experiences of displeasure).

The second philosophical stance views wellbeing through a eudaimonic lens. This type of wellbeing is described as psychological, and addresses an individual’s perceptions of the quality of their psychological functioning. Psychological wellbeing is concerned with a life well lived, and includes the interrelated facets of autonomy, environmental mastery, personal growth, positive relations with others, purpose in life, and self-acceptance.

To a lesser extent there is also a body of research on social wellbeing, referring to an individual’s quality of positive functioning in a social sphere. Elements of social wellbeing include social integration, acceptance, contribution, coherence, and actualisation.

If those who are developing New Zealand’s dashboard of indicators are not reflecting on the very human feelings and experiences captured in measures of subjective, psychological and social wellbeing, they may end up continuing to paint an incomplete picture of the health of our country. Subjective evaluations of insecurity are as important as material indicators of inequalities, and how financial decisions are made in households can provide as rich a dataset for policy makers as those related to asset ownership.

Evaluating the relationships between wellbeing indicators, income and health, in a New Zealand context can provide valuable information for policy makers. As people adapt to any improvement in economic conditions, such as a pay-rise, they return to a subjective wellbeing set-point, and focusing on improving economic growth has not been shown to increase a population’s overall wellbeing.

Focusing on policies that consider wellbeing variables as social outcomes, such as improving working conditions or increasing community relationships, are more likely to produce corresponding increases in wellbeing.

Any indicators that make no distinction between economic transactions that enhance or diminish wellbeing will not take into account issues of deprivation or inequity, nor will they consider a nation’s morals, values or culture. The relationship between health equity and wellbeing is clear with health status reported as a driver of life satisfaction and happiness. Subjective evaluations of a person’s physical and mental health have been found to be more important to their overall wellbeing than objective measures.

In particular, perception of mental health status was associated with reported life satisfaction. A UN commissioned literature review on subjective wellbeing evidence that people do not demonstrate resilience or adaptation to physical health changes, with those who report feeling less healthy in comparison with others in their age group, also reporting less happiness.

Policy decisions informed by a deeper understanding of the impact of improved societal wellbeing require an increased focus on policies driven by identified community needs and outcomes. Research supports an imperative for effective national indicators of wellbeing to support more holistic drivers of societal progress and the policies and interventions that are needed to improve population wellbeing.


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Diener, E. (2000). Subjective wellbeing: The science of happiness and a proposal for a national index. American Psychologist, 55(1), 34.
Diener, E., Suh, E. M., Lucas, R. E., & Smith, H. E. (1999). Subjective well-being:Three decades of progress. Psychological Bulletin, 125, 276-302.
Conceição, P., & Bandura, R. (2008). Measuring subjective wellbeing: A summary review of the literature. Office of Development Studies, United Nations Development Program. New York: NY.