Measuring the well-being of Lithuanian Households

Ivaskaite-Tamosiune, Viginta (2009). "Measuring the well-being of Lithuanian Households" Paper presented at the 6th annual conference of the HDCA, 10-12 September 2009, Lima, Peru.

This paper describes the first attempts to measure overall well-being of households in Lithuania. Despite simple economic indicators such as gross domestic product (GDP), per capita average income, expenditures and etc. are widely accepted and easy accessible, they lack comprehensiveness in terms of well-being measurement. Traditional income or expenditure-based approach is one-sided, not taking into consideration very complex structures of everyone’s life. In recent decades a well-being or quality of life issue has been investigated not only in economics but also in other social sciences (sociology, political science, psychology). Growing literature on indicators and dimensions of well-being attempts to reveal the various aspects of well-being of deprivation. However, no single measure can be proposed in order to capture the complexity and multidimensionality in terms of relevant dimensions and indicators. The paper describes measurement methodology employed to create an index of well-being in Lithuania and presents the first results of well-being. The approach taken in this paper is based on the A. Sen’s capability approach, which enables to create an index by looking at households’ resources, functionings and utilities. The dataset used for the construction of a well-being index is Generation and Gender Survey, which was conducted in 2006, covering over 10 thousands households in Lithuania (a multi-stage random sample design was used for this Survey). Despite the dataset was not collected for the purpose of the measuring well-being, it was chosen because it contains relatively rich micro-level non-monetary information on households. Making use of information from the Generation and Gender Survey and following A. Sen’s capability approach 4 domains of well-being, consisting of a number of indicators were finally combined to form an overall index of well-being of Lithuanian households. These domains are material welfare, health, employment and education. Material domain contains indicators such as incomes, various durables and fulfilment of basic needs. Health consists of group of indicators, which reflect disabilities that interfere with daily routines, experiences and feelings of respondents’. When looking at employment dimension we examine whether respondent is engaged with any formal activity (she or he is an employee, employed, a students, a pensioner, in a military, is on maternity or paternity leave, etc.) or is unemployed or helping in a private household. Finally we look at the highest educational level achieved by a respondent. At first we have included the fifth, housing dimension, consisting of indicators such as property of the dwelling and number of rooms per person, but after reliability test was performed this dimension was excluded from the further analysis of the well-being.
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