Criticism of macroeconomic indicators of welfare and its alternative assessments

This article criticizes the macroeconomic indicators traditionally used to assess social and individual welfare and aims to identify indicators that can more fully and reliably measure not only objective but also subjective well-being. It was found that the impact of GDP on social welfare is controversial. This research demonstrates the weak points of monetary macroeconomic indicators that measure material well-being but do not provide information about the quality of people’s life or how individuals assess their well-being and quality of life. The inability of current indicators to fully reflect and assess ongoing economic and social changes is revealed in this paper. While human needs are increasing, levels of well-being and life satisfaction depend on nonmonetary factors, such as free time and greater opportunities for personal development. The methodology of the study is based on the economic theory of happiness. The conceptual approaches to the definitions of subjective well-being, happiness, and life satisfaction as well as possibilities of using subjective assessments of welfare are summarized in this article. A complex quality-of-life satisfaction index is proposed, including seven categories reflecting the objective aspects of the quality of life (material well-being, health, social connections, education, safe environment, work-life balance, ecology), and subjective assessments of life satisfaction. The index is estimated as the geometric mean of eight normalized variables. Estimates of the index for Russia based on official statistics and the RLMS-HSE for 2015–2022. Its dynamic showed an increase in the well-being of the population from 2015 to 2021 and a decrease in 2022.