The latest vogue in economics is the effort to quantify the impact of personal well-being on growth and productivity performance. The idea is to establish that if a population is “happy,” a country’s economic performance and output will improve — or at least be showcased in a better light.
The notion is fanciful to many, but the fact is many politicians are embracing it: President Nicolas Sarkozy of France established an independent commission headed by Nobel economist Joseph Stiglitz to build a new system of national economic accounts that better quantifies the impact of “well-being” measures like investments in health and social welfare on GDP performance. Its report was issued last September. Now UK Prime Minister David Cameron is following suit with a plan to incorporate such criteria in the Treasury’s budget process, while the Organization for Economic Cooperation and Development [OECD] and the UN Development Program [UNDP] are launching major research programs to create a standard for this that would work internationally, across markets.
With Big Pharma under pressure to justify its own contribution to the economy in an era of fiscal crisis, the question arises: could such research enhance the industry’s value proposition? Some new evidence suggests that there is. A working paper from the US National Bureau for Economic Research [2010/#12934] written by two UK economists analyzed EU Eurobarometer data involving 15, 000 people from 16 countries to develop a measure of well-being related to the incidence of high blood pressure. It found a positive correlation between higher well-being and lower blood pressure rates. In other words, countries that have invested more in efforts to reduce hypertension find their well-being is enhanced, yielding a dividend in superior economic performance against those who do not invest.
The authors conclude that in constructing new kinds of economic and social policies in the future, where well-being rather than real income is likely to be a prime concern, there are grounds to study people’s health as a key “social biomarker” that can drive improvements in economic performance.
Isn’t that the side Big Pharma needs to be on?