Why tourism economists should treat resident well-being more seriously

Beyond GDP

As a key measure of the level of economic activity, GDP measurement is an essential tool in managing the macroeconomy. As a headline variable in the System of National Accounts (SNA) of countries, it is widely used by policymakers, economists, international agencies and the media as the primary scorecard of a nation’s economic performance.

The assumption behind using the GDP to assess well-being is that the higher the level of economic production, the better people are able to satisfy their material needs. This is despite mounting evidence that economic growth, measured by growth of GDP, does not measure quality of life, social progress, human development or happiness (Bleys, 2012; Stiglitz, et al. 2009; 2018). Since GDP is a measure of products and services that are either exchanged through market transactions or produced with inputs purchased on the market, it is more suited to measure the aggregate supply side of economies than the living standards of its residents. Even if market prices were to exist for all produced goods and services and capital stocks and flows, this would still not provide a measure of the associated well-being outcomes. Market prices exclude externalities in production and consumption (positive and negative) that affect quality of life. Prices are determined by circumstances such as the distribution of wealth in society, forms of competition and quality of information and thus may not accurately reflect consumer preferences, let alone well-being outcomes. As a strictly economic measure, GDP does not account for changes in the non-economic aspects of well-being that are important determinants of the quality of life. These include community vitality, open and participatory government, the impartial administration of justice, access to affordable housing and health care, participation in lives of family and friends and engagement with others through strong social connections, all of which correlate positively with well-being (Costanza et al., 2009; Zencey, 2010).

Some specific limitations of the GDP measure may be listed: First, GDP tells us nothing about how growth is distributed at the household level across society. Statistical averages such as GDP per capita hide important disparities between different individuals, households or communities. Second, non-market production so important to tourism, such as household labour, unpaid care and volunteer work, as well as the informal/underground economy, go uncounted in GDP measurement. More generally, GDP tells us nothing about the value generated by non-market services provided in the household, in the public sector, in civil society and in broader ecological systems, as well as the economic costs of pollution, workplace stress and environmental degradation associated with industrial development (Fioramonti et al., 2019). Third, GDP measures the quantitative output and consumption of goods and services, ignoring quality attributes that can satisfy and enhance consumer well-being. Money spent on addictive drugs and gambling is just as ‘good’ by GDP standards as money spent on basic foodstuffs, books and exercise. Fourth, GDP ignores the effect of growth on the natural and social processes that sustain it, thereby encouraging ecologically unsustainable models of development (Fleurbaey and Blanchet 2013). Since GDP is a flow and not a stock measure, it does not directly capture changes over time in different types of capital or ‘wealth’ that affect future well-being, and that determine whether or not a particular development path is sustainable (Arrow, Dasgupta, Goulder, Mumford & Oleson, 2012; Boarini and d’ercole, 2013). Fifth, the shift to information-driven economies has generated apparently ‘free’ services from networked digital platforms, new forms of peer-to-peer consumption and sharing services, many of which are not recorded in official GDP estimates.

Recognition of the deficiencies of GDP as the primary goal of economic development has given birth to the Beyond GDP approach, developing broader measures of social progress and emphasising the need for a shift of emphasis from a production-oriented measurement system to one focused on the well-being of current and future generations (Stiglitz et al., 2009a; Durand, 2015). Proponents of Beyond GDP argue that well-being, rather than GDP, is the preferred metric to gauge societal progress. They acknowledge that well-being encompasses economic ‘welfare’ but argue that it is a wider concept that includes the full range of factors that make life worth living (Costanza et al., 2020). The Beyond GDP research agenda is currently developing a more comprehensive understanding of measures of social progress with enhanced well-being as core (Dalziel et al., 2018). Much of the research effort involves analysis of the foundations of the well-being economy considering the long-term impact of policy on holistic benefits for individuals, communities and society (Fioramonti et al., 2022).

Alternative indicators of progress generally fall into one of three categories (Goossens et al., 2007): Replacing GDP involves construction of indicators that attempt to directly assess progress. Approaches include the Ecological Footprint (Costanza, 2000), the Happy Planet Index (New Economics Foundation, 2016) and the Human Development Index (United Nations, 2016). Adjusting GDP involves adjusting household income, consumption and wealth, for monetised environmental and social factors. Included in this category are Gross National Happiness (Bates, 2009), the Genuine Progress Indicator (Kubiszewski, Costanza, Franco, Lawn, Talberth, Jackson and Aylmer, 2013), Adjusted Net Savings (Qasim and Grimes, 2018) and Green GDP (Hoff et al., 2021). Complementing GDP involves supplementing GDP with additional environmental and/or social information. Approaches include Sustainable Development Goals (UNWTO, 2018), Planet Happiness (Iriarte and Musikanski, 2019) and the Better Life Initiative (OECD, 2020).

Given that the majority of policymakers and researchers acknowledge the importance of economic indicators that provide the basis for systems of national economic accounts worldwide and are essential to economic management and government budget outcomes, the preferred option of many advocates of the Beyond GDP agenda is to develop a dashboard of well-being measures to complement GDP and other economic indicators, rather than replace or modify the concept itself (Stiglitz et al., 2018; Durand, 2020).

Despite the substantial implications for the direction of research in the social sciences, by and large, the influence of the Beyond GDP approach has been less obvious in tourism research than in other disciplines. To better understand the implications for tourism economics research, we must address the nature of ‘well-being’.

The nature of well-being

The terms ‘well-being, quality of life’ and ’happiness’ are often used interchangeably in the literature, despite differences between these concepts (Diener et al., 2018). Despite some differences of emphasis, well-being is widely agreed to be a multidimensional concept that embraces the things that people value, incorporating notions of material comforts, life satisfaction, happiness, individual freedoms, opportunities, flourishings, mental states and capabilities (Adler and Seligman, 2016; Smith and Diekmann, 2017; Tov, 2018; Helliwell et al., 2020). Although its meaning cannot easily be encapsulated in a single definition (Weijers and Mukhergee, 2016), most conceptualisations of well-being imply that individuals should have a range of choices, the freedom to choose according to their awareness and aspirations and the resources to realise their aspirations (Croes, 2016).

Several criteria are essential for constructing a framework that can be employed to determine well-being outcomes for analysis and policy regarding development activity including tourism development (Durand, 2015, 2020). These include (i) acknowledgement of both subjective and objective sources of well-being; (ii) distinction between current and future well-being outcomes, thus allowing sustainability considerations to be embedded into the framework; (iii) theory-based measures of key indicators; (iv) framework flexible enough to include additional dimensions and indicators as these are required to embrace resident values and (v) policy relevance. We discuss each criterion in turn before considering the implications for tourism economics.

Sources of well-being: Subjective and objective dimensions

A substantial number of sources of well-being have been identified in the literature, comprising a mix of subjective and objective factors (OECD, 2020; Fuchs, Schlipphak, Treib, Long and Lederer, 2020).

Subjective well-being (SWB) embraces individuals’ emotional and cognitive evaluations of their lives, their conceptualisation of happiness, peace, need fulfilment and life satisfaction (Diener et al., 2018). While the concept has a number of differing interpretations in the literature, it is widely regarded as comprising three elements: Life evaluation – reflective assessment on a person’s life or some specific aspect of life domains such as health, education, work, family, housing, income, social relationships supporting capabilities, means and long-term opportunities (Nikolova, and Graham, 2020); Experiential – personal feelings or emotional states such as happiness or joy (positive) or stress, anger and sadness (negative), that are temporary and are influenced by the immediate circumstances and states of being and doing (Nikolova and Graham, 2020); and Eudaimonia – a sense of meaning and purpose in life, or good psychological functioning such as flourishing, thriving or personal growth (Stiglitz et al., 2009a, b; Tov, 2018). Each of these elements is itself complex with several interactive components (Stone and Krueger, 2018). SWB indicators measure well-being outcomes directly, through individual reporting on these different aspects of their well-being.

In contrast, objective measures of well-being are the actual or reported levels of externally verifiable potential contributors to, or components of, well-being. Various researchers have proposed the existence of a set of ‘basic needs’ that are necessary for individuals to develop their own well-being (OECD, 2020). Objective sources of well-being include material living standards (income, consumption, wealth and quality of housing), alongside quality of life variables such as equity and fairness in the distribution of goods and services, good mental and physical health, nutrition, education, work–life balance, workplace features, good social relationships, community vitality, personal and financial security, good environmental quality and opportunities for civic engagement (Durand, 2015; Iriarte and Musikanski, 2019).

With some exceptions (e.g. Berbekova et al., 2022), tourism research has tended to employ subjective measures of well-being, employing relatively easily collected survey-based data on ‘perceptions’ and ‘attitudes’ of tourists and residents (Uysal et al., 2012; Hartwell et al., 2018; Uysal and Sirgy, 2020). In the special events area alone, Yu, Mair, Lee and Ong (2021) recently identified 46 peer reviewed journal articles employing subjective well-being (SWB) as the key performance variable. Within the SWB focus, measures of resident ‘life satisfaction’ tend to be emphasised in tourism research (Woo et al., 2018), ignoring the fact that the different elements of SWB (life satisfaction, experience and eudaimonia) capture different concepts, and the most appropriate measure will depend on context. Each element of SWB has different drivers and consequences, implying that no single measure can adequately replace the others. Tourism researchers need to explore the relevance of the different elements of SWB to resident well-being.

Consistent with the wider research effort in tourism, tourism economists also focus on SWB measures in their analyses. Economic modelling in tourism still tends to be based on utility maximisation rather than addressing real-world determinants of societal well-being. The ‘welfarist’ perspective underpinning mainstream (neoclassical) economic analysis emphasises the social welfare that people derive from consumption of goods and services purchased in the marketplace, where social welfare is a measure of the discounted present value of future utility across all persons (Fleurbaey and Blanchet, 2013). However, ‘utility’ or ‘welfare’ cannot be equated with the broader multidimensional conception of ‘well-being’ advocated in the wider social science literature (Tov, 2018; OECD, 2020). In neoclassical economics, ‘utility’ does not refer to something that is intrinsically good (although it is often mistakenly interpreted in this way), and a utility function is only a way of ranking alternative choices or actions. Indeed, the assumption that narrow welfare effects equate to personal or social well-being has presented a substantial barrier to real-world relevance of the type of economic modelling undertaken in the study of sustainable development (Costanza et al., 2020; Dwyer, 2021).

In recent years, a broader notion of well-being, beyond the neoclassical ‘welfarist’ conception, has received increasing attention in economic well-being research, measurement and policy (Adler and Seligman, 2016; Durand and Exton, 2019). Developments in behavioural economics, challenging the assumptions of the revealed preference approach, have led to a renewed interest in ‘Happiness Economics’ (Frijters et al., 2020; Nikolova, and Graham, 2020). Happiness research is a label for a wide range of research that aims to uncover the correlates or causal determinants of happiness, life satisfaction or subjective well-being (commonly abbreviated as SWB). Micro-econometric happiness equations have the standard form: W _it = α + βx _it + ε _it , where W is the reported well-being of individual i at time t and X is a vector of known variables, including socio-demographic and socio-economic characteristics such as marital status, income, health, employment status, social life, environmental quality and so on. The error term accounts for other, uncaptured causes of SWB (Nikolova and Graham, 2020). Happiness economists do not seek to replace income-based measures of welfare but instead to complement them with broader measures of well-being. The marginal rates of substitution estimated from responses to stated preference questions are used as weights to construct an index that aggregates across the dimensions of well-being (Benjamin et al., 2020).

Happiness research has been applied to a range of issues within the field of tourism economics (Croes, 2012; Rivera et al., 2016; Pratt et al., 2016). Ridderstaat et al., 2016; Chattopadhyay et al. (2021). While this research has provided new insights into our understanding of human experience and behaviour, several substantial criticisms cast doubts on the appropriateness of SWB measures in shaping and appraising public policy (Nikolova and Graham, 2020). The thrust of criticism is that a focus on subjective variables provides, at best, only partial information concerning well-being. Emphasis on SWB as pleasure or life satisfaction reflects an ‘instrumentalist’ view that valued attributes of life such as good health, material security, fulfilling social relationships and so on are merely causal contributors to the ultimate goal of a pleasurable subjective state (Austin, 2016). Subjective approaches risk insufficient attention being given to the structural causes of well-being. Since SWB measures typically fail to capture the various complexities of the well-being concept, the policy relevance of SWB findings is limited. Not only are individuals often poor judges of their own future well-being, they tend to give intergenerational well-being outcomes relatively little weight in decision-making compared to current well-being. A focus on SWB is thus likely to ignore conditions that affect the sustainability of well-being outcomes (Dwyer, 2021).

The Beyond GDP approach affirms that subjective and objective well-being should be considered simultaneously when gauging residents’ well-being. A multidimensional approach with mix of subjective and objective sources of well-being, supporting a broad dashboard of well-being indicators, provides a sounder basis for analysis and for the design and appraisal of public policy than does a focus on a single source (Austin, 2016; OECD, 2020; Durand, 2020). On the Better Life Initiative, for example, SWB is just one of 10 dimensions of well-being, with other dimensions comprising income and wealth, jobs and earnings, housing, health, work–life balance, education and training, social connections, civic engagement and governance, environmental quality and personal security (OECD, 2020). This mix provides the essential basis for the capabilities approach which offers a richer and more useful foundation for well-being analysis and policy (Austin, 2016; Dalziel et al., 2018). A detailed understanding of well-being outcomes in the tourism development context must recognise the relevance of both subjective and objective measures, with particular attention to the types of links between subjective (perception) indicators of human well-being and the objective measures (Smith and Diekmann, 2017). To date, only a limited number of tourism studies have incorporated objective indicators to measure resident well-being (e.g. Berbekova, et al., 2022).

Theory-based indicator selection

Given the need for well-being estimates to inform tourism analysis and policy, the measures used by tourism researchers must be credible with a sound basis in theory. Theory-based well-being indicator selection helps to ensure that the development assessment process is strategic, consistent, facilitates benchmarking and inter-destination comparison. Measures of well-being are now being informed by a substantial body of empirical evidence (Helliwell et al., 2020). A growing number of countries have now incorporated well-being measures into their assessments of social and economic progress (Iriarte and Musikanski, 2019), employing international principles of data collection (Exton and Shinwell, 2018). In parallel, international statistical agencies are progressively developing measures of well-being at individual, household and community levels (Durand, 2015, 2020). The quality of data and the empirical robustness of these being measures may be expected to progress over time as indicators are developed that better capture conditions in the various dimensions of people’s lives (De Smedt, Giovannini and Radermachier, 2018).

The question arises as to which set of indicators is most suitable for tourism economists to determine resident well-being outcomes associated with tourism developments. The tourism research literature however is characterised by failure to develop measures in a consistent way. To date, tourism research, with only some exceptions, generally has tended to ‘cherrypick’ well-being indicators from varied data sources rather than base them upon established theoretical frameworks. To the extent that different variables and measures are used to assess resident well-being, the various findings lack comparability. Unless tourism researchers adopt or develop the types of well-being measures employed by policymakers, their findings will have little relevance to the wider public debates on appropriate resource allocation to enhance social well-being. Recently, in a series of articles, Dwyer (2020b, 2021, 2022b,c) has argued in support of using the Better Life well-being framework in tourism study, arguably the most highly regarded conceptual framework for understanding and measuring well-being and societal progress to have emerged from the Beyond GDP agenda (OECD, 2020; Durand, 2020). Identifying over 80 indicators of current and future well-being, the Better Life dashboard comprises current well-being outcomes, well-being inequalities and the resources and risks that underpin future well-being (Eurostat, 2019; OECD, 2020). The Better Life framework provides credibility and consistency to support well-being research and measurement (Exton and Shinwell, 2018). At the same time, the framework is flexible enough to include additional dimensions and indicators of well-being as these are developed, including those that may be specifically tourism related (Dwyer, 2020b). Despite its expected advantages as an analytic and policy tool and calls for case studies to be undertaken (Dwyer, 2020b), tourism researchers are yet to undertake empirical studies using the Better Life framework.

Flexibility

A well-being framework must be flexible enough to embrace a variety of indicators of well-being that reflect the particular values of different cultures and communities. While Uysal and Sirgy (2019) argue that each destination must choose its own set of indicators, in our view, unless a core set of indicators is included, comparisons of well-being between different destinations will be infeasible. An ideal well-being framework used to estimate resident well-being outcomes will comprise both ‘generic’ indicators based on credible frameworks and ‘contextual’ indicators relating to particular resident values within the destination (Durand and Exton, 2019). Ideally, the framework should allow individuals and communities to set their own weights on the importance of each of the different dimensions of well-being, as does the Better Life Initiative (OECD, 2020).

Two main approaches to indicator development exist: composite indices versus a dashboard approach. Composite indices aggregate different measurement dimensions into a single index, to serve as the main or only indicator. However, the seeming simplicity of this may disguise several value-laden decisions regarding choices over which domains and indicators to use and their weightings (Weijers and Mukherjee, 2016). Researchers and policymakers have criticised single figures for being difficult to interpret as they cover so many diverse dimensions. Of particular concern is the formulation of ‘mashup’ indices which mix and match different metrics, scales and conceptual bases into aggregate metrics (Nikolova and Graham, 2020). Where composite indexes such as HDI have been employed in destination studies (Ridderstaat et., 2016; Rivera et al., 2016), comprising indicators of income, health status and educational attainment, these exclude several important dimensions of resident well-being.

In contrast, a dashboard approach to indicator development has the advantage of presenting separate information for each well-being dimension, whether subjective or objective, making it possible to identify the different sources of resident well-being outcomes associated with development activity (Durand, 2020). Many researchers argue that a dashboard approach, such as the Better Life Index, fits best with theoretical conceptions of well-being and is the most useful for policymakers. The precision offered by a scoreboard of distinct indicators can serve to develop targeted policies to address particular gaps in well-being outcomes.

Policy relevance

If measures of resident well-being are to make a real difference to people’s lives, they must be explicitly employed in the tourism policymaking and assessment process. A well-being framework should inform debate on the most relevant dimensions of well-being among destination residents and also guide policies that improve resident well-being. A growing number of countries (e.g. Bhutan, New Zealand, UK, France, Scotland, Sweden, Ecuador and Italy) are using well-being metrics to guide decision-making and inform budgetary processes (Exton and Shinwell, 2018; Llena-Nozal et al., 2019), while international agencies, including the United Nations, the OECD, the World Bank and the European Union, are also actively engaged in this task (Durand and Exton, 2019). An advantage of indicators developed in consultation with international statistical agencies is their consistency with destination Systems of National Accounts, SNA (Stiglitz et al., 2018), providing a credible basis for benchmarking and policymaking (Adler and Seligman, 2016).

Well-being as a tourism policy objective

Well-being outcomes help to inform policy trade-offs and provide more relevant information for tourism stakeholder decision-making than standard performance measures. Well-being measures can also be used to identify policy gaps and issues that are not receiving sufficient attention by policymakers.

There are two main ways in which resident well-being outcomes, broadly defined, can be incorporated into studies of tourism development. One option is to select particular well-being indicators to sit alongside standard indicators of destination performance (Boley and Perdue, 2012; Crouch and Ritchie, 2012). In this vein, Rivera et al. (2016) recommend that destination managers could construct a happiness index to measure the well-being of residents in combination with other indicators such as GDP per capita and employ this index to inform policy. This is consistent with recent arguments (Croes and Kubikova, 2013; Uysal and Sirgy, 2019; Berbekova et al., 2022) that certain well-being indicators (associated with health, education and safety, for example) are essentially additional destination performance indicators, rather than replacements.

A second option is to employ a broad set of well-being indicators to act as a ‘lens’ to convert destination performance indicators into resident well-being outcomes. On this view, well-being outcomes do not merely complement key performance indicators but form the ultimate assessment criteria for estimating the level of progress associated with tourism development. Taking seriously the view that the ultimate goal of tourism development is resident well-being, well-being measures cannot be regarded merely as complementary or additional to standard performance measures; rather they must be regarded as the ultimate or overarching measures of tourism destination performance.

Regarding the second option, preliminary attempts have been made to demonstrate how a well-being lens may be employed in tourism research to inform policy efforts to enhance resident well-being outcomes and to measure societal progress (Dwyer, 2021, 2022a, b, c). The suggested well-being lens, comprising a broad multidimensional indicator set, can act as a ‘filter’ or ‘prism’ through which tourism development impacts must pass in order to identify and measure the present and potential future effects on resident well-being. The indicator set can be selected from diverse sources in the research literature, including tourism impact studies or, more appropriately, may be based on an already developed well-being framework. In constructing a well-being lens, it is essential that tourism policymakers and destination managers identify the underlying values that residents wish to satisfy. At the grassroots level, residents can engage in a visioning exercise with public surveys, workshops and consultations to determine which dimensions of well-being are most valued by the community (Iriarte and Musikanski, 2019; OECD, 2020). The well-being lens is thus consistent with a community-based approach to tourism development, helping to ensure that tourism development meets the collective needs of host communities. The lens can be used ex ante (policy formulation) or ex post (policy evaluation) and can be adapted and improved over time as better statistics become available and as the links between tourism impacts and resident well-being outcomes are better understood. The development of the well-being lens with appropriate content will be challenging in destinations with limited statistical resources and competing statistical demands or where many well-being data are not collected routinely or exist only outside the national statistical system. While various challenges must be overcome, the quality of data and set of preferred indicators may be expected to progress over time, resulting in more accurate measures of social progress.

The proposed well-being lens can play an important role in analysing the well-being outcomes of alternative development paths and identifying policies that enhance social well-being. Although at present, this approach to install well-being into the heart of policymaking is resistant to formal modelling, it does have substantial theoretical and practical advantages. The well-being lens can be applied to different stages of the policy cycle, from strategic analysis and prioritisation to policy evaluation (Exton and Shinwell 2018). Well-being outcomes with particular relevance to tourism can be employed to enrich the study of well-being in general and to inform the content of the well-being lens formulated for different tourism destinations and contexts. The well-being lens can inform public and private sector strategies directed towards ‘designing for well-being’ (Uysal et al., 2020) – involving investments that expand residents’ capabilities for creating and sustaining well-being (Dalziel et al., 2018).

While various conceptual and empirical challenges still need resolution, the recommended well-being lens can represent an essential component of policymaking. Identifying resident well-being as central to tourism policymaking requires not just additional measures and data but also embedding well-being into the culture and machinery of government decision-making (Durand and Exton 2019). In this way, policy goals defined in terms of well-being outcomes are systematically reflected in decision-making across the economy. Public and private sector organisations can invest in types of built, natural, human and social capital that will best enhance well-being outcomes given the resources invested. Empirical studies are needed to further explore the links between tourism impacts and well-being outcomes. In particular, there is an urgent need to develop more robust well-being measures appropriate to tourism development affecting well-being outcomes for different segments of the resident population and to better assess and design policy to support sustainable development (Adler and Seligman, 2016). In the policy domain, managing a portfolio of different capital stocks must be regarded as a central task of DMO policy towards destination sustainable development. Tourism economists can provide important input to inform this analysis.

How study of well-being outcomes can advance tourism economics and policy

Well-being considerations have either been ignored or marginalised in several important areas of tourism economics. These include tourism growth, sustainable development destination competitiveness, event evaluation and tourism industry participation in the United Nations SDG 2030 Agenda. We now examine these areas of tourism economics to illustrate how the neglect of well-being outcomes has restricted the scope of economic analysis and the policy significance of tourism economics research.

Tourism and economic growth

On the Beyond GDP approach, economic growth is not an end in itself but a means to a greater end encompassing social, political, cultural and psychological needs, aspirations and values of individuals and the social collective. However, much of the debate concerning the impacts of tourism-led economic growth versus economic growth-led tourism ignores the associated resident well-being outcomes of each process (Benkraiem et al., 2021). A prevailing assumption among some economic researchers who focus only on economic outcomes seems to be that economic growth (tourism growth in particular) is good if it fosters greater income and employment in the destination. Tourism economists often ignore findings in the wider economic growth literature that increased GDP does not improve long-term societal well-being once a comfortable standard of living has been reached – within a country, wealthier people tend to be happier than the less wealthy, but beyond a certain threshold, well-being levels do not increase alongside increasing income (Easterlin and O’Connor, 2020). An explanation for this is that humans are on a ‘hedonic treadmill’ – aspirations increase along with income, and after basic needs are met, relative rather than absolute levels of income matter to well-being (Nikolova and Graham, 2020).

While the research effort has emphasised impacts associated with tourism growth such as environmental degradation, carbon emissions, energy consumption, ecological footprints and the effects of overtourism generally (Dwyer, 2018), growth (and de-growth) models in tourism typically remain superficially focused on material wealth while failing to acknowledge the importance of deeper meaning in life and values beyond material well-being (Pugno, 2019; Benkraiem et al., 2021)). Findings of a two way relationship between tourism growth and resident well-being (Ridderstaat, 2016b; Kubickova et al., 2017; Lee et al., 2021; Berbekova et al., 2022) suggest that rather than focusing solely on economic growth employing standard economic indicators, tourism economists should consider the ultimate outcome – human well-being. These ideas are yet to find traction in the tourism economics literature. Attention to resident well-being outcomes associated with tourism growth can provide policymakers with valuable insights into important questions such as how tourism growth might translate into improved living standards and societal progress consistent with community values and how the fundamental drivers of well-being can act as drivers for sustainable tourism growth. Research currently underway can help to assess well-being outcomes of tourism development associated with residents of different demographic background characteristics (such as occupation, nationality and industry involvement), different levels of analysis (individual, family, community and national) and the extent to which well-being outcomes are influenced by the existing level of industry development (Woo et al., 2018; Uysal and Sirgy, 2019). Such studies suggest that tourism development policies should give increasing importance to non-economic aspects of life rather than focusing narrowly on economic growth.

The links between productivity, economic growth and resident well-being are now receiving increased attention by researchers and policymakers (Weijers and Mukherjee, 2016). Recent studies show that the drivers of productivity growth generate wider well-being outcomes beyond material well-being (Llena-Nozal et al., 2019; Dwyer, 2022a). While acknowledging the essential role played by productivity as a driver of economic growth, it is noteworthy that tourism economics has devoted little attention to analysing the links between productivity and well-being. With the addition of a ‘well-being lens’ to determine the well-being outcomes of the various effects associated with productivity growth, researchers, industry and policymakers can identify types of productivity-enhancing strategies that can improve social well-being (Dwyer, 2022a).

Sustainability

A sustainable system is one that does not undercut its own preconditions for existence (Zencey, 2010). Capital stocks act as a transmission mechanism for supporting intergenerational well-being, an essential condition for destination development to be sustainable. If tourism research on sustainability is to be theoretically grounded, the role of changing capital stocks and the associated resident well-being outcomes must be acknowledged as essential to sustainability assessment (Dwyer, 2021). To date, the outcomes for resident well-being of changing capital stocks associated with tourism development have received little attention in the tourism literature including tourism economics. Tourism economics research needs to become more relevant to, and consistent with, advances in sustainability theory and practice occurring in the wider research literature. The ‘capitals approach’ helps to prioritise alternative development paths, informing decision-makers about the substitution possibilities between capital stocks and permissible trade-offs that may be made between them (Arrow et al., 2012). Some tourism-related studies have recently addressed the associations between changing capital stocks and resident well-being outcomes (Moscardo et al., 2017), but the dynamic links between the quantity and quality of capital stocks and resident well-being outcomes remain under-researched.

Tourism economists can play a leading role in exploring the relevance of the capitals approach to advance our understanding of the conditions for achieving sustainable tourism development. If the capitals approach is to adequately inform sustainable tourism development, in a way that is practically relevant, its scope needs to be extended beyond restrictive models to capture the multidimensional complexity of the well-being concept (Dwyer, 2021). New metrics under development incorporate current knowledge of how natural, social, human and built capital assets interact to contribute to sustainable well-being (De Smedt et al., 2018; World Bank, 2018; Costanza et al., 2020; Costanza et al., 2020).The estimated measures must be used with caution as monetary valuation and potential aggregation are strongly linked with the concept of weak sustainability. Weak sustainability allows trade-offs between the different forms of capital, so long as the aggregated monetised value of all capital stocks is non-declining, or (preferably) increasing, over the time. In contrast, strong sustainability recognises that some ‘critical’ capital stocks must remain intact, especially those environmental resources and ecological goods and services that are essential for human life support and well-being (Barbier and Burgess, 2017). Despite the emergence of the capitals approach as the dominant approach to sustainability measurement in global economic governance over the last decade, the theoretical and practical implications of applying strong sustainability conditions in tourism planning and development has been a relatively neglected area in tourism research generally, including tourism economics. Clearly, a substantial research effort will be required if the capitals approach is to be assumed greater relevance in the study of sustainable tourism development, conceptually and empirically (Dwyer, 2021).

Destination competitiveness

Determining appropriate strategies to achieve destination competitiveness is a central feature of tourism analysis and policy debate. Several analytical frameworks dominate the literature (Dwyer and Kim, 2003; Crouch and Ritchie, 2012; WEF, 2020). Each employs a ‘dashboard’ approach to identifying indicators of destination competitiveness, enabling tourism stakeholders in both the private and public sector to identify key strengths and weaknesses of destinations, the opportunities for tourism development and threats that must be countered. Not surprisingly, given the range of features associated with destination competitiveness, a large number of indicators have been developed by researchers and practitioners, both generic and specific to particular destinations.

The established destination competitiveness frameworks typically provide the tourism stakeholder with a ‘snapshot’ of destination attributes at a particular time, ignoring the potential well-being outcomes for residents associated with destination development. The Beyond GDP approach and its associated well-being measures has substantial implications for strategies to achieve destination competitiveness. The past decade has seen a growing awareness among researchers that the ultimate rationale for achieving a competitive tourism industry is to contribute to the ‘well-being’ or ‘quality of life’ of residents (Crouch and Ritchie, 2012; Boley and Perdue, 2012). Simultaneously, a reciprocal relationship has been found to exist, whereby tourism development contributes directly and indirectly to a range of resident well-being outcomes, which in turn enhance destination competitiveness (Ridderstaat et., 2016; Kubickova et al., 2017; Woo et al., 2018). Several studies have employed an established index of well-being alongside standard indicators of destination performance. Thus, Croes and Kubickova (2013), Kubickova et al. (2017) and Croes, Ridderstaat and Shapoval (2020) (Croes et al., 2020) use the Human Development Index (HDI) in their studies of destination competitiveness, while Chin and Hampton (2020) investigate the link between destination competitiveness and resident perceptions using indicators of social welfare from the Happy Planet index. An important finding of Berbekova et al. (2022), following examination of the relationship between a synthetic set of 16 quality of life indicators and a synthetic set of five destination performance indicators, is that objective quality of life indicators are significant predictors of tourism demand alongside traditional demand determinants (e.g. per capita income, relative exchange rate). The findings suggest that new, comprehensive measures of destination performance can be developed by incorporating well-being measures as destination performance indicators. A research agenda to further explore the implications of the reciprocal relationship between resident quality of life and destination performance should strongly advance the destination competitiveness literature. More recently, Dwyer (2022a) has argued that construction of a well-being lens to convert tourism impacts into resident well-being outcomes is a preferred strategy that should appeal to destination managers.

Despite such studies, well-being indicators remain conspicuously absent from the indicator sets developed to assess destination competitiveness. It is recommended that tourism economists take up the challenge to better integrate well-being measures into the established destination competitiveness frameworks.

Event evaluation

For many years, event evaluation has been dominated by ‘standard’ economic impact analysis (EIA), historically using input–output (I–O) modelling and more recently using Computable General Equilibrium (CGE) models to improve scope of analysis and accuracy (Dwyer, 2020a). There is increasing awareness, however, that festivals and events provide opportunities for enhancing a variety of experiences, social interactions and relationships that promote residents’ well-being beyond any material gains (Yu et al., 2021). These outcomes are not captured by standard EIA. Nor are they captured by cost–benefit analysis since the use of money (or willingness to pay) as the measure of value is firmly rooted in neoclassical economic theory, which conceives of human well-being in terms of utility (or preference satisfaction), focusing on the price (or exchange) value of goods and services.

Growing numbers of researchers are now exploring the SWB associated with participant and resident experience of special events (Yolal et al., 2016). Use of SWB in special event evaluation has been criticised for its failure to consistently employ validated measurement tools and conceptual models (Yu et al., 2021). In any case, the inadequacy of SWB as sole primary input to inform policymaking has been exposed above.

Although there is increasing attention to the ‘legacy effect’ of special events on destination branding, image building and future tourism inflows (Yolal et al., 2016), little attempt has been made to link future resident well-being with changes in capital stocks associated with the development of special events. It is the changing quantity and quality of capital stocks that will determine the legacy effects of special events. Once again, we see that the capitals approach has the potential to provide the conceptually appropriate basis to analyse the long-term effects of events, and future research should acknowledge this. Estimation tools required to measure well-being effects associated with special events need more detailed attention from tourism economists. Well-being assessment can be employed proactively as an adaptive management tool to achieve better development outcomes from holding special events (Dwyer, 2020a).The well-being measures employed should blend objective and subjective components.

Tourism participation in SDG 2030 Agenda

An understanding of resident well-being outcomes and associated indicators is necessary to determine the success of the global tourism industry in meeting the Sustainable Development Goals (SDG) 2030 Agenda (UNWTO, 2018; Kanbur et al., 2018). In much of the research literature, positive well-being outcomes are simply assumed to follow upon progress towards achieving each SDG. This (false) assumption has resulted in the relative neglect by tourism researchers including tourism economists as to how well-being outcomes can be incorporated into development of comprehensive indicators of SDG achievement. Assessment of tourism’s progress towards achievement of the SDGs is also incomplete without a full accounting of the outcomes of tourism development on future well-being (Dwyer, 2022b). Resident well-being outcomes associated with tourism participation in the SDG 2030 Agenda remain under-researched.

Different destinations should emphasise particular SDGs over others depending on their expected outcomes for resident well-being (Costanza et al., 2016) Dwyer (2022b). For tourism policymaking to enhance resident well-being, estimates are required as to the net effects on well-being resulting from achievement of one SDG at the possible expense of others and, equally, to estimate the ‘win-win’ gains in well-being outcomes associated with complementary progress across two or more goals. Trade-offs must also be made between well-being outcomes achievable at the present time and for future generations. In particular, a better understanding is needed of the nature of the links between tourism progress in respect of SDG achievement and well-being outcomes for different segments of the resident population, both within and outside of the tourism industry.

Estimation of resident well-being outcomes can inform tourism policymaking to achieve sustainability objectives consistent with the 2030 SDG agenda. To give serious attention to the sustainability of well-being as essential to tourism development, complementary studies are also needed of the effects of changing capital stocks on both current and future well-being, and the links with the different SDGs, a relatively neglected research area to date (Dwyer, 2022b)