Subjective Well-Being Approach to the Valuation of International Development: Evidence for the Millennium Development Goals

The subjective well-being approach to the valuation of international development is applied to the Millennium Development Goals (MDGs). Results indicate that the rich countries have particular preference for education, healthcare, and housing; they are willing to accept compensation for a failure to meet the three targets by 2015. The poor countries view all the MDGs as important; they are willing accept compensation for a failure to achieve all the targets by 2015. Results also indicate that what the poor countries are willing to accept in terms of compensation matches the amount that would have been the pledge of 0.7% proportion of incomes of the rich countries for international aid. These findings imply that the MDGs can be accomplished at an affordable cost.