Methodology

Five dimensions have been selected which can be used to determine wellbeing on a cross national level: education, health, economic condition, freedom and security, and the environment. These dimensions consist of sub-indicators listed below. These sub-indicators have been chosen to construct the dimension which would be sensitive to the condition of both developed and less developed countries.

Education

• Adult literacy rate of the total population
• Gender parity index for adult literacy
• Secondary school enrollment
• PISA results of reading, mathematics and science

Economic condition

• Per capita GDP
• Ease of doing business
• Unemployment
• Gini index
• Inflation, average consumer prices

Security and freedom

• Democracy index
• International homicide rate
• Corruption perception index
• Prisoner population rate
• Willingness to fight
• Level of violent crime

Environment

• GEF benefits index of biodiversity
• CO2 emissions
• Environmental disasters
• Industrial/ transport accidents
• Hazardous waste generation

Health

• Overall life expectancy at birth
• Difference between female and male life expectancy at birth
• Healthy life years
• Malnutrition prevalence, weight for age

Theses dimensions are calculated for each country and if enough data is available an overall index is constructed. The purpose is not only to develop an accurate overall value for each country but also to compare the values across nations.

Calculations
Step 1: Performing a z-transform on all the sub-indicators:
A z-transform was performed on the sub-indicators in order to make the samples comparable:

z =

z ... z-transform
x ... original values
x̄... mean
s ... standard deviation
The z-transform, also called standardization, was used in this instance since it does not alter the form of the distribution; it only adjusts the mean and standard deviation. Thus the data quality is not compromised and measured values of different sub-indicators can be compared with respect to their position in the distribution.

Step 2: Averaging the z-scores of the sub-indicators. The sub indicators for example overall life expectancy at birth, difference between female and male life expectancy at birth, and healthy life years, malnutrition prevalence (weight for age) were averaged to calculate the health dimension.

Step 3: Data cleanup process

• Countries with less than four out of five dimensions of wellbeing were removed.
• Countries with dimension (health, security and freedom) built up of less than 3 sub-indices were removed.
• Countries that had more than one dimension that was built up of less than 3 sub-indices were removed.

Step 4: Overall index calculated by averaging the dimensions. The health, economic, political and environmental dimension were averaged to create the overall index.