Measuring Well-Being Index with Environmental in Mind: Evidence Forest Land Use in Indonesia

Abstract

This project aims to create an objective composite wellbeing index from the point of view of the whole by using a complete welfare methodology and suggested weightings to take into account the differences between the components. Forestry total productivity (TFP) was also compared because of the importance of the environmental component in preparing the well-being index. This study examined 64 social, economic, environmental, and institutional indicators from the BPS-Statistics Indonesia, the Ministry of Environment and Forestry, and the National Disaster Management Agency. Three primary analysis elements were highlighted in this investigation. First, PCA created a weighted index of eleven important domains. Second, it creates a well-being index model for Indonesia's environmental sustainability. Third, comparing forestry's environmental dimension to its TFP. This study found that the Indonesian wellbeing model under construction weighs environmental quality, living conditions, including housing, and happiness. Indonesia's disaster-prone locations make environmental quality important, unlike other wellbeing indices. Forest degradation has decreased the composite wellbeing index, notwithstanding other socio-economic improvements. This study stands out from past research by being the first to compare the environmental dimension with forestry total factor productivity (TFP). Deforestation significantly affects the well-being index in Indonesia.