OECD: one or many?. Ranking countries with a composite well-being indicator

Abstract

This paper provides a composite indicator of well-being for the 35 OECD countries, South Africa, Russia and Brazil for the period 2013-2016, considering data on ten different wellbeing domains from the OECD Better Life Index (BLI). In a first stage, countries are ranked according to their well-being indicator, constructed combining Data Envelopment Analysis (DEA) with the Benefit-of-the-Doubt (BoD) principle and Multi-Criteria-Decision-Making (MCDM) techniques. In a second stage, well-being clubs are identified using hierarchical cluster analysis, finding that wellbeing is highly polarised. Moreover, as well-being affects people, population size is accounted for in the cluster analysis, showing that for the largest proportion of people in our sample well-being is remarkably low.