Originally published by Psychology Today. Reposted with permission.
The famous Exxon Valdez oil spill of 1989 had a disastrous effect on the local people and wildlife. According to the best estimates, over 250,000 seabirds, 2,800 sea otters, 200 harbor seals, 250 bald eagles, 22 killer whales, and billions of salmon and herring eggs suffered and lost their lives. Even four humans died. Further, according to The Atlantic, “many Alaskan beaches remain polluted to this day, crude oil buried just inches below the surface.” And yet, according to economists, it had a net positive impact on the US economy. This and other such stories highlight a glaring limitation of GDP—the most prevalent metric used to assess the progress of countries.
The trouble with GDP is that it is too narrow a measure of progress: it measures only economic output, leaving out other things that matter—like interpersonal trust, mental health, and environmental impact.
Contrast GDP with GNH—or Gross National Happiness, which measures the happiness (or subjective well-being) of the citizens of a country. (Bhutan is the only country in the world to systematically measure GNH at present.) At first glance, GNH might seem like a whimsical yardstick and a poor substitute for GDP. “Of what use is happiness—other than that it feels good?” you may think.
Map of Bhutan (Pixabay)
But think again. Findings show that there are many benefits to being happy. As De Neve and his coauthors concluded after analyzing hundreds of studies, not only are happier people healthier and more compassionate, they are also more productive. So, what this means is that happier countries are likely to be more productive than their less happy counterparts.
This may be why Tony Hsieh, cofounder of one the most successful entrepreneurial ventures ever, Zappos, and author of the best-seller Delivering Happiness, made the happiness of his employees and customers his top priority. As a result, within 10 years of its inception, Zappos reached a record $1 billion in sales! (Just in case you don’t know what Zappos does, it sells shoes.)
Despite several good reasons to measure happiness—a topic on which several scholars, including Richard Layard and Arthur Brooks have written books—only a handful of countries actually measure GNH. Why is this?
One reason is that happiness is thought to be difficult to measure because people differ in what makes them happy. While happiness may have been a warm gun to the Beatles, it certainly wasn’t so to the actress Mae West (who is credited with saying, “Is that a gun in your pocket or are you just happy to see me?” to a policeman).
It turns out that this belief—that happiness is difficult to measure—isn’t really valid. Although people do vary in what makes them happy, happiness means more-or-less the same thing to most people. This is why the easiest way to measure happiness—through self-reports in which people are simply asked to fill out a happiness scale—correlates significantly with the levels of neurotransmitters (like serotonin) in our blood stream. This is also why people who say they are feeling happy are rated as being happy by their friends and relatives, and why those who claim to be happy behave in ways that we have come to associate with happy people. Note that none of this would have been true if happiness were subjective and difficult to measure.
Another objection to GNH stems from the assumption that material success—which is what GDP measures—is a perfect proxy for happiness. “So,” the argument goes, “why measure GNH separately? Don’t we know how happy the citizens of a country are if we know the country’s GDP?”
The answer, it turns out, is: Nope, we don’t!
Although there is little doubt that material success does boost happiness, what’s equally true is that material success alone cannot fully account for all of happiness. This is why, after a certain level of household income (around $75,000/year in the US), greater income does not lead to greater happiness. This is also why, after a certain level of per-capita GDP (around $36,000), further increases in wealth doesn’t increase the happiness of countries.
Where does this leave us? It tells us that there is value in measuring GNH. That’s not to say that we should altogether abandon GDP; after all, it is the best indicator we have of economic progress, and measuring economic progress is important. Rather, I believe that we should, at the very least, supplement GDP with GNH.
Doing so, as both Layard and Brooks, and more recently three other scholars, have noted, would make for a world that is not only more productive, but also socially and environmentally conscious—something that we can all agree is important in this day and age.
Raj Raghunathan, PhD, is a professor of marketing affiliated with the McCombs School of Business at The University of Texas at Austin. He is interested in happiness and decision making. He is associate editor at the Journal of Consumer Psychology, guest associate editor at the Journal of Marketing Research, and on the editorial boards of Journal of Marketing and Journal of Consumer Research. He is the author of If You’re So Smart, Why Aren’t You Happy?