Title: Life Quality Index – an empirical or a normative concept?

Authors: Ove Ditlevsen, Peter Friis-Hansen

Addresses: Technical University of Denmark, Department of Mechanical Engineering, Coastal, Maritime and Structural Engineering, Nils Koppels Alle, Building 403, DK 2800 Kgs. Lyngby, Denmark. ' Technical University of Denmark, Department of Mechanical Engineering, Coastal, Maritime and Structural Engineering, Nils Koppels Alle, Building 403, DK 2800 Kgs. Lyngby, Denmark

Abstract: The LQI by Nathwani et al. (1997) is a social indicator that kept constant allocates a part of a country|s GDP to life saving initiatives. Is the LQI built on empirical evidence of a social behaviour that implies a desired balance between free time and work time? It is shown herein that a time balancing principle leads to an explicit mathematical formula connecting work time and value productivity. Comparisons of the formula with available OECD-data show that it fits well to the data for several countries. However, it is argued that the necessary inclusion of the expected life in the LQI definition is beyond empirical verification. Thus the LQI invariance principle is claimed to be a chosen, though reasonable, normative rule of ethical resource allocation. Discrepancies between the logics of the derivations of existing variants of the LQI are mostly epistemological in nature and of less importance for the applications.

Keywords: balanced societal economy; life quality index; life saving activities; LQI definition; LQTAI definition; money allocation; OECD data; work time economy; social indicators; GDP; gross domestic product; free time; work time; productivity; invariance principle; ethical resource allocation; risk assessment; risk management.

DOI: 10.1504/IJRAM.2007.014666

International Journal of Risk Assessment and Management, 2007 Vol.7 No.6/7, pp.895 - 921

Available online: 23 Jul 2007 *

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