You are here
How do we develop happiness? (Part 2)

How do we develop happiness? (Part 2)

In Part 1 of  ‘How do we develop happiness’, Weh Yeoh looked at the increasing trend of governments to enact policies aimed at increasing their citizens’ happiness.

In Part 2, Sophia Kagan looks at how governments can measure happiness and how these measures can impact on government policies. Is there, hiding amongst the empty political rhetoric, a real way in which policy makers can genuinely make people happier?

The origins of measuring ‘happiness’

Ever since the invention of the abacus, increased income has been the holy grail of progress. Both in rich and poor countries, increased GDP was a constant mantra, almost synonymous with development and growth. That was until a realisation started to creep into the minds of economists and policy makers (based as much on personal anecdotal evidence as on empirical studies) that money doesn’t necessarily make us happy.

Of course, they were not the first to come to that ‘ground breaking’ realisation. Artists, writers and philosophers from Artistotle to Kanye West have assured us that money doesn’t equal happiness. Psychologists have meanwhile been mining for data on happiness levels for decades through surveys and experiments and have also come to the conclusion that the correlation between rising income and subjective happiness is weaker than once thought (yes, the rich are generally happier than the poor but as countries get richer they often don’t get happier).

Although Bhutan’s trial of Gross National Happiness began back in 1972 (see How Do We Develop Happiness? Part 1), the debate about the inadequacies of the GDP measure didn’t reach Western shores until perhaps the 1980s when economist Amartya Sen coined the concept of the “capabilities approach” as another way of figuring out how to improve people’s well-being through public policy. The focus of his new approach was to look at the opportunities or freedom that people have to choose the life they want to lead rather than their consumption (example: a traditional approach might classify a man who has not eaten for 2 days as deprived. However, if he is fasting for religious reasons, the capabilities approach would reflect the fact that it is his decision and freedom not to eat).

Sen’s new approach became so influential that it came to form the framework of the UN’s Human Development Index (‘HDI’), which was created in 1990 with the purpose of shifting “the focus of development economics from national income accounting to people-centered policies’’. Though Sen was loathe to fix in stone a list of capabilities to be measured (arguing that this depends on personal value judgements), the HDI does just that – propounding indicators of human development across three themes of lifespan, educational attainment and income. Over 169 countries are now included in the HDI’s annual league tables (that rank countries according to their performance on indicators) making it perhaps the most widely used index after GDP.

Since the development of the HDI there has been an explosion of splinter indexes and league tables including the Happy Planet Index, the Genuine Progress Indicator, the Satisfaction with Life indicator, the World Values Survey and the International Social Survey Programme. The concept has even made its way to the UN General Assembly, which, in July this year, adopted a non-binding resolution that acknowledges happiness as an indicator of a country’s success. The UN resolution calls on countries to “pursue the elaboration of additional measures that better capture the importance of the pursuit of happiness and well-being in development with a view to guiding public policies”.

A closer look at different ways of measuring ‘happiness’

1. Capabilities approach: Examples of this approach are the HDI, the MPI (discussed below) and the Millennium Development Goals. This type of measurement (built around objective measures rather than subjective levels of happiness) has been particularly common in the international development sector where it is perhaps most relevant. Although traditionally measurement of poverty has been focused on household income (think of the seductive simplicity of the $1 or $1.25-a-day measure), this often doesn’t give a comprehensive picture of why and how people are poor. Enter the Multidimensional Poverty Index, a sister index of the HDI which measures acute poverty across 104 countries through indicators including child mortality, nutrition, years of schooling, access to electricity, drinking water, sanitation, cooking, and, even, the flooring of your abode. A household is identified as multi-dimensionally poor if it is deprived in some combination of indicators whose weighted sum exceeds 30 percent of deprivations. Sounds great in theory (after all, the measurement can at least provide policymakers and donors with information about the most vulnerable households and groups), but the indexes are not without their share of critics. Some lament their failure to include more factors (such as environmental degradation or other ecological factors). Others quibble over the formulas used in the number crunching, arguing that it gives an overly negative image of certain countries, such as many of those in Africa (for more info see here and here).

2. Measuring ‘subjective’ happiness (ie through self-reporting and analysis): One example of this is the UK, where the government proposes to collect statistical data about people’s perceptions of their well-being and life priorities (through self-reporting on such questions as how happy or anxious they have been feeling, how satisfied they are with their lives). The advantage of this approach is that you can directly gage what is important to the population using flexible indicators. In addition, this type of measurement can be seen as a democratic way of impacting on government policies. The difficulty is that subjective happiness is just that – subjective. It can be hard to analyse and use to draw useful conclusions.

Of course, both subjective and objective factors can be used together in measuring happiness. In the report commissioned by France’s president Nicholas Sarkozy, drafters Joseph Stiglitz and Amartya Sen attempt to marry objective measurement with self-reporting (though the report is fairly vague on exactly how this is to be done). The OECD has also attempted to combine the two types of measurement in its own index which allows the users to play around with the weighting of the indicators, depending on what you think is most important.

Measure this! How do you objectively measure the intensity of (un)happiness when priorities can be so drastically different? You also run the risk of collecting a whole lot of contradictory data that is hard to use for the purposes of decision making

Are the indexes fairly similar though? Does data from one support the other?

Instinct might tell you that these measures should fit together. After all, if I live in a country with high life expectancy, good education opportunities, good healthcare, then presumably my life satisfaction will be fairly high. And if I have overall life satisfaction then I’m likely to respond fairly well in ‘happiness’ surveys?

Not so, it seems. Partly this might be due to the fact that short term happiness and long term happiness aren’t identical and the fact that self-reporting surveys might measure short-term ‘hedonic’ contentment (or discontentment) or they might measure long-term satisfaction (see Part 1, which discusses how having children may result in short term unhappiness but long term satisfaction). Partly it may be because there are just so many surveys asking so many things that ultimately there’s bound to be some contradiction without coherence and consistency.

Take the case of Australia. Australia has consistently rated high on HDI, moving from 4th place in the world in 2008 and 2009 to 2nd place in 2010. It also ranks very highly on OECD charts. However, some argue that this characterisation is inconsistent with other data and incorrectly implies that Australians are ‘happier’ than they really are. For example, Blanchflower and Oswald (2006) use life satisfaction statistics to find that Australia’s performance is only mediocre, and even poor in some categories such as job satisfaction: looks at all the various indexes long enough and you’ll see a myriad of other contradictions for other countries as well.*

This is confusing. If there’s little correlation between the various happiness measures, might it not be best to stick with something clear like GDP measurements in policy making?

Measuring happiness and using it for public policy is a little tricky but that shouldn’t cause governments to give up. In fact, governments already take well-being issues into account when governing – for example, they look at air quality, urban planning such as community areas and parks to improve citizens’ wellbeing even though they are not strictly speaking GDP-related concerns. Should governments, however, take the step of quantifying citizens’ happiness (both through a needs and an outcome assessment), to make the process more rigorous and scientific? Considering the difficulty of measuring happiness, would it be useful, or just a costly and distracting exercise in navel gazing?

My conclusion is that measuring happiness (or well-being, satisfaction with life or whatever you want to call it) is a good thing when using the right tools because it provides transparency and incentive to government. It is without measurement that government can give lip service to these concepts without taking any genuine action. For example, quantifying greenhouse gas emissions has been important in making real progress beyond aspirational grandstanding. However, overcomplicating the issue with too many measuring sticks is also not ideal. Perhaps it’s best to focus on a few measurable indicators (those employed by HDI can be a good starting point), particularly on measures that are quantifiable, but supplementing where necessary with targeted subjective surveys. Despite scepticism, both objective and subjective indicators have been shown to provide meaningful and reliable data when used in the right way. Not only does this hold the promise of delivering a good measure of quality of life, but it also gives governments a way to better understand their citizens, beyond just knowing what they earn and how much they pay in taxes.

In summary, a matrix of indicators, not just GDP, is likely to give us a much better picture of development in both wealthy and least developed countries. Although the indicators can be hard to determine, there are plenty of measures which gives us a good guide that can be followed and tweaked in future.

*See article here for a response to Blanchflower and Oswald’s assessment

The following two tabs change content below.

Sophia Kagan

Sophia Kagan is currently a student at the London School of Economics, completing an MSc in International Development Management. Prior to this she was a consultant with the United Nations Industrial Development Programme and an Australian Youth Ambassador with the International Labour Organization in China.

Related posts

9 thoughts on “How do we develop happiness? (Part 2)

  1. Brendan Rigby

    A very insightful and well-thought article. Thanks Soph. Alex makes a very apt warning about top-down interventions and policies for increasing happiness. And, I think this is one of the underlying questions in your article and around this debate in general: who should determine what happiness is and how it can be nurtured?

    I think one of the main fallacies in the debate around this central question has to do with epistemology – or in other words knowledge. Whose knowledge are we using to think about discuss these questions? It seems to be rather Euro-centric. Jules Evans wrote recently on this same topic in a post called "Can you measure eudaimonia?" ( I understand Jules' use of the Greek word, but found it a little disconcerting and revealing. Much like International Relations, this debate is grounded in the history, politics and culture of Europe, tracing its lineage back to Greek philosophy. So, the use by Jules of 'eudaimonia' is very revealing. It is very derivative and unaccessible to many, particularly those whose happiness we are wanting to measure. I am not sure how many other perspectives on this debate there are from other non-European cultures and histories. Here is one example:

    1. Sophia Kagan

      Thanks for your comment Brendan. I agree – there is not a lot of information discussing perspectives on happiness from non-European cultures though of course there is plenty coming out of Bhutan (indeed it was Bhutan that initiated the General Assembly resolution on happiness). I do think that articles on happiness do quite often (unnecessarily in my opinion) start with the obligatory rundown on what Artisotle, Bentham and John Stuart Mill have to say about happiness. Sure it's interesting for history buffs but happiness is a dynamic, evolving concept and shouldn't be so constrained by what Western philosophers had to say about it (incidentally, the word eudaimonia in this debate is unnecessary – it is essentially interchangeable with 'well-being'). There needs to be more analysis on happiness from non-Western countries however I do think that, whatever the origins of the debate, happiness can and should be measured, though different research tools may be needed in different cultural contexts.

  2. Alex Grey

    As an interesting annecdote re the problems some people have with the HDI, I recently read a China Daily article (actually an Opinion Piece without that title), staunchly claiming the HDI is designed to, and does, humiliate the countries at the lower end of the ranking in that way is mean and unhelpful and occi-centric Index. That made me sigh in almost all the ways First Dog illustrates.

    1. Sophia Kagan

      Sounds interesting – could you share a link to this article? I remember attending a conference a few months ago in Beijing during which a researcher presented his findings on a pilot project which was measured using MPI (multidimensional povety index) to a room full of Chinese policymakers. The MPI generated a lot of very heated debate!

  3. Alex Grey

    I liked the careful detail in this post. Objective and subjective data are used in combination many disciplines, and I think you make a good case for using both in policy making, particularly in arguing that the subjective views on citizens' happiness create transparency and incentive for government. Those are benefits of serious worth even if subjective/qualitative data is less "rigorous". (NB Subjective data can be rigorous if the methodology is good, rigour isn't only a feature of objective data collection.)

    Linking this to the Part 1 post, I believe we should be careful of using this data on happiness to make policies aimed specifically at 'increasing happines'. That is a trap for governments to just start making policy to meet their own indicators rather than actual needs, and may even have negative effects in the collection of data and making of indicators in future (as the Wire says, "duking the stats").

    1. Sophia Kagan

      Alex, I certainly agree with your conclusion. You're right, subjective data can be very credible even though it is so often mistrusted and ridiculed by the public (the UK public's reaction to David Cameron's suggestion about putting questions about happiness into the household survey is just one example). As with any data collection, the important thing is to ensure that the research is designed and implemented by independent evaluators rather than policy makers with an interest in a particular outcome.

  4. Steve

    I'm curious how exposure to information affects the subjective happiness indices. On the one hand, learning tends to increase my overall life satisfaction. On the other, some information — advertising in particular — leads me to think my life is missing something that could make it more satisfying. Are the happiness indices influenced by these effects?

    1. Sophia Kagan

      That’s an excellent question Steve. I think advertising is one of the reasons why the link between rising prosperity in the West is not matched with an equal rise in happiness levels. One explanation could be something often referred to as the ‘hedonic treadmill’ – the theory that as a person makes more money, their expectations and desires also rise, which results in no permanent gain in happiness (ie. Like running on a treadmill they stay in the same spot) – and this is something which is fuelled by advertisers. Advertisers' goal is to make something you possibly don’t need seem indispensable.

    2. Sophia Kagan

      As you say, education, on the other hand clearly seems to make us more happy, right? Not so, some research suggests. This article ( indicates that education on its own seems to have little impact on happiness levels. It’s true that more educated people are happier, but that effect disappears once income is controlled for. So, in other words, it's not education that makes people happy but income – and even that seems to have a smaller effect than you would expect (as discussed above). The jury is still out on this it seems! If you're interested, this article titled Education, Happiness and Wellbeing is technical but contains some useful info (

Comments are closed.