Misery Index Improvement: A Review Based on Theoretical and Empirical Evidence

With countries’ misery index analysis being increasingly utilized to measure welfare and macroeconomic performance, there is a rising curiosity about understanding a comprehensive economic misery index that is able to provide a more nuanced understanding of economic distress and well-being within a society. This review provided a misery index improvement based on existing theoretical and empirical evidence. Using a system review method, after two screening phases, the study examined 100 publications spanning from the 1960s to 2024. We reviewed the literature on its historical measurement, how it was used and conceptualized, and proposed improvements by various scholars. The study proposed a new misery index including the sum of the annual unemployment rate (U), inflation rate (I), bank lending rate (R), and exchange rate (EX), all of which deducted the real per capita gross domestic product (RGDP), in short, (U + I + R + EX)-RGDP. The study recommended that future researchers include the current challenges, including sustainability in the environment, income disparity, innovations in technology, and life satisfaction indicators, while establishing and expanding the misery index.