Distributional Issues in Well-Being: A Case Study of New Zealand

Abstract

It is now widely accepted that well-being is inherently multidimensional and that relying solely on economic indicators such as Gross Domestic Product or income fails to capture the comprehensive nature of human well-being. New Zealand is recognised as a global leader in well-being policy, exemplified by initiatives such as the first Well-being Budget and the national multidimensional well-being framework. However, existing measures remain insufficient in fully capturing the distributional aspects of well-being across different population groups. This thesis examines distributional issues in well-being in New Zealand through two studies. The overall objective is to assess the distribution of well-being across different demographic groups and to investigate the influence of cultural identity on individual life satisfaction. In the context of New Zealand’s diverse society and significant indigenous Māori population, this thesis aims to identify which populations are most vulnerable to well-being deprivation and to inform policies that promote more equitable well-being outcomes.

Given that the existing research in New Zealand remains limited in exploring the distributional aspects of well-being, a multidimensional well-being index was constructed at the individual level using Categorical Principal Component Analysis (CATPCA). This composite index encompasses eight domains of well-being and is used to analyse the distributional patterns across population groups. The findings reveal pronounced disparities: Māori and Pacific peoples are considerably more likely than other groups to experience low well-being across multiple domains and are among the most vulnerable to well-being deprivation, which calls for more group-focused and culturally responsive policy interventions.

Indigenous Māori have historically faced systemic inequalities that have undermined their well-being, while their distinct cultural identity has fostered resilience. The second study examines the relationship between cultural identity and life satisfaction. Using pooled ordinary least squares (POLS) regression and Oaxaca-Blinder decomposition, it analyses differences in life satisfaction between Māori and European New Zealanders. The analysis confirms that Māori report lower life satisfaction on average than Europeans. The Oaxaca-Blinder results attribute this gap partly to differences in socioeconomic resources and partly to unexplained factors, suggesting the presence of structural influences beyond observable characteristics. Cultural identity emerges as a crucial factor, with a stronger connection to Māori identity being associated with higher life satisfaction. However, existing studies suggest that broader structural factors can also contribute to these disparities. The analysis suggests the need for policy interventions that target cultural and structural factors. Strengthening Māori-centred frameworks, such as He Ara Waiora, while addressing systemic barriers in housing, healthcare, and income equality, is crucial. Policies should provide equitable opportunities for Māori to translate their cultural assets into tangible improvements in life satisfaction.