Back in March this column discussed the shortcomings of GDP as a metric for judging the well-being of citizens and how their national economies are performing. GDP estimates economic activity or people’s income over a given time span.
It says very little about the quality of life, the environment, health, life expectancy or social stability. It does not tell us whether resources are being used sustainably. In short, reliance on GDP as a metric for progress emphasises quantity over quality and the future.
Awareness of the shortcomings of GDP has led to a growing number of alternative estimations of social progress and well-being. Bhutan has been measuring Gross National Happiness as well as GDP since the 1970s. The Organization for Cooperation and Economic Development has elaborated guidelines for measuring subjective well-being.
Some have tried to develop composite indicators to capture what matters most to people and their societies. Other efforts are focused on one thing, such as development, life expectancy, literacy, educational attainment, or poverty.
An interesting recent effort is a composite index published in the World Happiness Report. The 2015 version is the third report produced since the initiative was launched in 2012. It is published by the Sustainable Development Solutions Network, a non-governmental organisation. The Report aspires to influence national policymakers and inform debates at the United Nations.
The underlying data are collected by the Gallup World Poll, which was established in 2005 and is representative of 95 per cent of the world’s adult population in over 10 countries. Gallup collect data for a multitude of indexes, and the World Happiness Report avails itself of elements of those involving subjective well-being.
Six variables make up the rankings listed in the World Happiness Report. These include two elements – GDP per capita and healthy life expectancy – for which official national statistics are readily available. The other four metrics of happiness are subjective, and measured through a ‘ladder’ procedure where survey respondents are asked to rank their feelings on a scale of one to ten. Ten is tops.
