How is the methodology behind the Index different from last year?
While the underlying principles of prosperity behind the Index remain the same, some things have changed. First, this year’s Index uses 79 variables that have a statistically demonstrated link to either economic growth or subjective well-being, almost twice as many variables as last year’s Index, which used 44. Second, this year’s version is an “index of indexes”: nine sub-indexes on specific topics were created by testing the 79 variables. The nine sub-indexes were equally weighted and averaged to produce the final rankings. Third, we have eliminated some indicators used in previous years – the impact of climate, for example – whose correlation to predictions of prosperity is less robust.
