OECD: One or Many? Ranking Countries with a Composite Well-Being Indicator

This paper provides a composite indicator of well-being for the 35 OECD countries, as well as South Africa, Russia and Brazil for the period 2013-2016, considering data on 10 different well-being domains from the OECD Better Life Index. In a first stage, countries are ranked according to their well-being indicator, constructed combining Data Envelopment Analysis with the Benefit-of-the-Doubt principle and Multi-Criteria-Decision-Making techniques. In a second stage, well-being clubs are identified using hierarchical cluster analysis, revealing that well-being 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.