This chapter defends the approach outlined in the introduction, arguing that it is the only rational basis for decision-making.

We aim to maximise the wellbeing of the people, given the size of the budget. The rational approach is therefore to calculate the BCR of all possible policies and select those with the highest BCR. Benefits are to be measured by life satisfaction. These are then monetised by dividing them by the marginal utility of income (of the person with average income). In calculating total Wellbeing-Years (WELLBYs), we discount future changes at 1.5 per cent per annum, while for costs, we discount at the discount rate for money of 3.5 per cent per annum.

We encourage policymakers to take into account the initial wellbeing of those whose wellbeing is affected. This is done by showing the average wellbeing of the gainers from the policy (and their number) as well as the losers. New policies should also be sought in particular to help those who are suffering. In the UK, the causes of misery (in terms of share of variance explained) are in order: mental illness, physical illness, loneliness, bad work, unemployment and poverty.