This approach claims that both personal characteristics and social circumstances affect what people can achieve with a given amount of resources.

What really matters for well-being is what the person manages to do or to be. But well-being is more than that - it also includes freedom.

Preference-based perspective is the idea that people are better off when they themselves consider what is important.

Some people think hard work is necessary to have a valuable life while others prefer family or going out with friends.

Two Belgian economists show that different approaches to well-being can have practical consequences. Using average income, average life satisfaction, and average "equivalent income," Danes are more satisfied than they are wealthy while France is the opposite.

For policy purposes, the different measures of well-being hint at the important issues involved in deciding which measure of well-being - if any - to select.