Most economies around the world measure their prosperity and progress using a metric economists call the Gross Domestic Product, or GDP. It is measured by tracking economic activity on, well, everything. GDP is equal to the sum of the price of all goods and services sold in the country at any given time.
We’ve argued here on The Inspired Economist before that GDP is not a good measure of an economy’s well-being, and further, that it is a very poor measure of the new economic realities we face, regarding an ever-increasing population, dwindling natural resources, and economic and social externalities.
Many progressive economists have been pushing for a more holistic approach to measuring prosperity and progress, and have argued for the use of the Genuine Progress Indicator (GPI). Rather than go into the GPI, I just suggest you check out our article: GDP vs GPI: Which measures the economy best?
Enter Gross National Happiness
GPI may have more economists backing it, but Gross National Happiness (GNH) garners far more interest in the general public. Could you really measure a country’s prosperity based on its citizens’ sense of quality of life? GNH has one more thing going for it that GPI does not: a country that has fully adopted it as its sole measure of economic activity. That country is Bhutan, a small, relatively isolated country at the base of the Himalayas in Asia. More on that in a moment.
While GDP measures just one thing (the flow of money), GNH measures four: good governance, sustainable socio-economic development, cultural preservation, and environmental considerations. For those really interested, the methodology is described in detail here on page 46-51 (pdf). But to sum up, GNH is “based on the Alkire-Foster method for measuring multidimensional concepts such as poverty, wellbeing or inequality.” It starts with survey research. People across Bhutan are surveyed about their satisfaction and happiness, and the sufficiency with which they feel happy with a variety of “domains”. So in essence, a question might ask a Bhutanese citizen how satisfied they are with their family’s access to enough healthy food as one of the domains (or indicators). Another might be their job situation. And another how good their access is to clean drinking water. At last count, there were 33 domains (indicators) that Bhutan is using in its GNH.
Once all the data have been gathered, aggregate scores are tallied across the domains for each person. If someone marks themselves as being “sufficient” in a majority of the domains, they’re generally considered happy.
According to a report entitled “An Extensive Analysis of the GNH Index” (PDF), the cutoffs for these sufficiency measures (domains/indicators) are “imperfect and arbitrary” but the “concept [of not having “enough”] is well understood.” So effectively, if people don’t feel they have “enough” access to parks, that would count against their overall happiness. But tallied up with the other 32 indicators, that one measure alone wouldn’t make one count as “unhappy”.
So to calculate GNH, a novel approach is used. Those folks who are “happy” are pooled into one group (we’ll call this GroupH). Those who don’t make the cutoff are pooled into the other (GroupUn). As per the chart above, and quoting from the report: “a person is not required to achieve sufficiency in all indicators in order to be happy.” In other words, to get into GroupH, you’d have to have sufficiency in most of the indicators, but not all. I am a generally happy person, but I’m grotesquely insufficient in the number of yachts I own, so if that were one of the 33 indicators (it’s obviously not), I could still be counted as happy if I had sufficiency in many of the others. Bhutan uses sufficiency in 66% of indicators as the “cutoff” for putting people in GroupH. For those folks who don’t have sufficiency in at least 66% of the indicators, they’re placed in GroupUn.
But as a measure of society, it’s valuable to know more than just how many folks are in each group. So GroupUn is further subdivided so that deeply unhappy people don’t contribute much at all to overall GNH, but those who are marginally happy do contribute some.
GNH, then, is measured as the percent of people who have sufficiency in 66% or more of the domains, PLUS a fraction of the remainder. In the above example, 3 of 7 folks are happy. That’s 43%.
The remaining 57% are weighted.
As you can see, Jampel and Tashi have sufficiency in 5 of the 9 indicators (in this example, they’re just using 9 instead of 33 for simplicity sake), so they’re happier than Thinley, who only has sufficiency in 3 of the 9. So in GroupUn, the unhappy group, there is sufficiency in 17.6 of the 36 total indicators, or 48.9%.
So the headcount of folks in GroupUn, the unhappy (57%), is coupled in a fairly complex mathematical formula, with the average shortcoming of their unhappiness (48.9%) to get a metric for just how unhappy the unhappy are.
GNH, then is basically quantified by adding the two groups (GNH is measured on a scale from 0 to 1, basically to give an overall percentage of happiness in a country). To get the figure, you basically add how many people are happy to the folks who are unhappy multiplied by just how unhappy they are. If GroupUn is pretty much on the brink of happiness, then the overall Gross National Happiness that results is pretty high. If GroupUn is on the brink of total depression, then the overall Gross National Happiness will be very negatively affected by the depths of these folks unhappiness.
The Pursuit of Happiness: isn’t that what it’s all about anyway?
It’s a pretty elegant solution. After all, what’s life beyond the Pursuit of Happiness, right? Now that you know what GNH is, any measure of a society’s prosperity just based solely on financial transactions seems pretty…paltry. Doesn’t it?
While Bhutan is currently the only country using GNH, it is gathering momentum in many other places. GNH has been toyed with in Brazil and Canada, and has some support in the U.S. in the form of a nonprofit called Gross National Happiness USA. Locally, there are groups like Measure What Matters Vermont popping up everywhere and trying to push the agenda into local governments.
Learn more at GrossNationalHappiness.com