Exploring wider well-being in the EU-15 countries: an empirical application of the Stiglitz report

We draw on the recommendations of the Stiglitz Report to select a set of economic and social variables that can be used to make cross-country comparisons of wider well-being. Using data for the EU-15 countries for 1999 and 2005, we show how three-way analysis can be used to extract synthetic information from a large data set to determine the main latent explanatory factors. In our case, we identify one dominant factor that we term the development profile, which is positively associated with the level of education outputs, technological progress and female labour market participation and negatively associated with the level of pollution. We rank the countries according to this factor and compare these rankings with simpler GDP comparisons and find that the two rankings are only weakly correlated