Level of Living and Well-being as Measures of Welfare: Evidence from European Countries

Abstract

The aim of the present study is to elaborate generalized indicators describing objective and subjective aspects of welfare and analyze the relationships between them based on the sample of European countries. While applying the quality of life approach we differentiate economic, human capital, social capital and emotional aspects of welfare. With help of confirmatory factor analysis generalized objective level of living and subjective well-being indicators to measure all mentioned aspects will be composed. Our results show that in countries with objectively lower positions the subjective assessments on welfare tend to be higher. Although an ideal situation could be imagined where objective and subjective assessments were equal, there are deviations from the equilibrium to both directions.