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Gross National Happiness vs. GDP

| Wednesday October 5th, 2005 | 0 Comments

money_happiness.gifEveryone knows that a certain amount of money can bring happiness. But we also know that life is more complex than that, and many factors that cannot be quantified in economic terms play a role in ensuring a satisfying livlihood. Free time, good health, an intact environment, and other factors are important too. So why do we insist on using Gross Domestic Product – essentially the sum of all money spent in an economy – as our primary indicator of progress?
The New York Times reports on the efforts of the nation of Bhutan which despite having one of the world’s lowest GDPs has made great leaps in terms of life expectancy, stability, and environment. The Bhutanese are attempting to quantify their progress as a country using not only GDP, but also “Gross National Happiness” as a measurement.
Another effort to provide a fuller picture of the state of society is the “Genuine Progress Indicator” (GPI) which has gathered some support of economists and “considers the value of housework, caring for children and the elderly, volunteerism”. It also counts spending due to crime as a negative number.

Neither of these may replace GDP any time soon, but clearly there is a need to add something else to the way we measure progress. If happiness itself cannot be quantified, then certainly factors that affect it can be added to or subtracted from whatever overall score we keep.


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