Should happiness, more than GDP, define a nation's success?

June 30, 2014: 7:06 AM ET
gross national happiness
The tiny nation of Bhutan started measuring "gross national happiness" in the 1970s. More recently, public experts have started to tout the importance of measuring citizens' well-being in addition to GDP.
NEW YORK (CNNMoney)

The drafters of the Declaration of Independence didn't really define "Happiness" when they cited the pursuit of it as an inalienable right.

But in recent years, there's been a quest to define and measure it, especially in the context of a prosperous economy.

That's because economic growth as measured by gross domestic product doesn't really tell us much about citizens' general well-being.

"For example, traffic jams may increase GDP as a result of the increased use of gasoline, but obviously not the quality of life," according to a report by an international commission chaired by Nobel Prize-winning economist Joseph Stiglitz.

The assumption is that the more economic growth the better. Legislators are forever debating the merits of a measure on the basis of whether it would create jobs and boost GDP.

But rarely do you hear lawmakers debate whether a measure will boost or detract from citizens' well-being, of which income is just one part.

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Take North Dakota. Its economy has doubled in the past 25 years thanks to a massive oil boom. Incomes have soared, but so have prices, traffic, crime, and housing shortages.

Well-being, of course, relies on many factors -- from health and education, to environment and culture, to the quality of governance, your community and how you use your time.

There's a growing international chorus that thinks this kind of well-being should be measured and used as a guide when formulating policy and tracking social progress.

The tiny nation of Bhutan pioneered the effort, adopting a "gross national happiness index" decades ago.

The rest of the world has been slow to catch on. But there have been nascent efforts in recent years to address the issue.

In 2011, the U.N. General Assembly passed a resolution encouraging countries to measure their citizens' happiness and use that measure to help guide public policies.

More recently, the Organization for Economic Cooperation and Development (OECD) has created guidelines for nations that want to measure well-being.

In the United States, four states -- Maryland, Vermont, Oregon and Colorado -- have developed a "genuine progress indicator," according to Demos, a left-leaning think tank.

The GPI seeks to quantify in a consistent way the cost and value of factors not measured by GDP.

For instance, Maryland -- which was the first state to adopt a GPI -- is seeking to assess, among other things, the "environmental and social costs of what we buy, [and] the quality-of-life impacts of how we live."

Some cities and towns, meanwhile, have started their own "happiness initiatives," distributing gross happiness surveys to residents to give local policymakers a sense of the level of their constituents satisfaction in different areas.

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It doesn't appear that there will be any kind of universal agreement to measure citizens' happiness and well-being anytime soon.

But proponents -- such as the Sustainable Development Solutions Network (SDSN) -- are trying to make the economic case to governments as to why they should.

"Happy people live longer, are more productive, earn more, and are also better citizens. Well-being should be developed both for its own sake and for its side-effects," SDSN noted in its 2013 World Happiness Report.

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