Economics studies scarcity and the allocation of resources. Central to societies’ economic objectives is the reduction in scarcity and central to that is economic growth. Certainly, economic growth is a major objective of all governments. They know that they will be judged by their record on economic growth.
But what do we mean by economic growth? The normal measure is growth in GDP. But does GDP measure how much a society benefits? Many people argue that GDP is a poor proxy for social benefit and that a new method of establishing the level of human well-being and happiness is necessary.
And it’s not just at macro level. As we saw in a previous news article, A new felicific calculus? happiness and unhappiness are central to economists’ analysis of consumer behaviour. If we define ‘utility’ as perceived happiness, standard consumer theory assumes that rational people will seek to maximise the excess of happiness over the costs of achieving it: i.e. will seek to maximise consumer surplus.
There have been three recent developments in the measurement of happiness. ‘Understanding Society’ is a £48.9m government-funded UK study following 40,000 households and is run by the Institute of Social and Economic Research (ISER) at the University of Essex. It has just published its first findings (see link below).
The second development is the work by the ONS on developing new measures of national well-being and includes a questionnaire asking about the things that matter to people and which should be included in a measure or measures of national well-being.
The third development will be an addition of five new questions to the Integrated Household Survey:
• Overall, how satisfied are you with your life nowadays?
• Overall, how happy did you feel yesterday?
• Overall, how anxious did you feel yesterday?
• Overall, to what extent do you feel the things you do in your life are worthwhile?
But after all this, will we be any closer to getting a correct measure of human well-being? Will the results of such investigations help governments devise policy? Will the government be closer to measuring the costs and benefits of any policy decisions?
- Married for less than five years, young, childless: survey finds that’s happiness
- The UK’s largest household longitudinal study launches its early findings
- Happiness Studied in Britain
- Statisticians to tackle ticklish issue of happiness
- Survey to ask ‘How happy are you?’
- ONS happiness questions revealed
- What makes us happy?
- Bhutan’s ‘Gross National Happiness’ index
- Bhutan’s experiment with happiness
- Gross National Happiness: The 10 Principles
- You’re asking me if I’m happy? What kind of a question is that?
- Happiness = Work, sleep and bicycles
- The Future of Consumption and Economic Growth
- Happiness: A measure of cheer
Guardian, David Sharrock (27/2/11)
MeD India (1/3/11)
Financial Times (24/2/11)
BBC News (24/2/11)
The Telegraph, Tim Ross (24/2/11)
The Telegraph (7/3/11)
The Telegraph, Dean Nelson (2/3/11)
The Third Pole (China), Dipika Chhetri (25/2/11)
The Huffington Post (China), Nancy Chuda (24/2/11)
Independent, Natalie Haynes (26/2/11)
BBC News blogs, Mark Easton’s UK, Mark Easton (25/2/11)
Minyanville, Professor Pinch and Conor Sen (14/2/11)
Financial Times (27/12/10)
- Well-being: Measuring national well-being
- Consultation: Measuring national well-being
- Consultation: Measuring national well-being: the questions
- The measurement of subjective well-being
- Integrated Household Survey
ONS, Stephen Hicks (4/2/11)
Understanding Society site
- Early findings from the first wave of the UK’s household longitudinal study
Understanding Society, Jon Burton, Heather Laurie and Peter Lynn Institute for Social and Economic Research, University of Essex
- For what reasons might GDP be a poor measure of human well-being?
- How suitable is a survey of individuals for establishing the nation’s happiness?
- How suitable are each of the four specific questions above for measuring a person’s well-being?
- Why, do you think, has average life satisfaction not increased over the past 30 years despite a substantial increase in GDP per head?
- Give some examples of ways in which national well-being could increase for any given level of GDP. Explain why they would increase well-being.
- Should other countries follow Bhutan’s example and use a ‘groass national happiness index’ to drive economic and social policy?
- If human well-being could be accurately measured, should that be the sole driver of economic and social policy?
- Do people’s spending patterns give a good indication of the things that give them happiness?