The Happiness Index

A New Way to Measure the World Around Us

What is the value of being happy?

Yes, happiness means different things to different people, but even without having a common definition, happiness has become a significant focal point of study and research around the world. And working on the assumption that whatever we measure will get better, the “happiness index” will become a significant measuring stick for our progress.

Here are some of the more recent developments on the happiness front:

• In September 2006, China announced that it was in the process of formulating a “happiness index” based on living conditions, the environment and salary.
• Similarly, the “stiff upper lip” members of the British government are devising a “happiness formula” showing and contrasting the quality of life in communities throughout the UK. This work is based on the belief that future governments will be judged on their success in making people happy.
• In July 2006 the New Economics Foundation did a study and announced that the island country of Vanuatu was the happiest place on earth.
• A recent MORI (Market & Opinion Research International) poll showed that dogs bring more happiness into people’s lives than ‘steady relationships’ and ‘job satisfaction’. Owning a dog was at the top of the happiness index with 81% of the 2,000 people surveyed stating that their happiness “significantly improved” when a dog came into their lives.
• Average happiness levels in the U.S. dipped significantly right after Katrina hit. But within two weeks, average levels of happiness rebounded to pre-storm levels.

So what does this collage of disparate happiness facts tell us about the future? To begin with, the happiness index is quickly becoming a recognized barometer for measuring the health and well-being of a community, organization, or country. As an example, any group scoring low on the happiness index is more likely to have increased incidence of depression, alcoholism, and crime. Conversely, groups displaying a high score will be more productive, actively involved in their community, and generally working to make the world a better place.

Globally, the happiness index will be used to spot trouble before it happens. A community with angry, frustrated people can quickly become a boiling cauldron of activity, and the happiness index will become an early predictor of everything from civil war to terrorist hotspots.

Richard Layard at the London School of Economics argues that “rational policy-making is now possible since happiness is a real scalar variable and can be compared between people.” He theorizes that any change to a law or a system should undergo a “happiness impact study” much like what we do with environmental impact studies on construction or development projects.

Increasingly, politicians from all sides are taking notice of the findings and discussing how they might capture the elusive feel-good factor.

However, the science of happiness also still poses huge questions among policy-makers. As an example, one of the great mysteries of happiness research is that economic growth has not raised U.S. or Japanese happiness much if any in the last 50 years, according to University of Michigan Economist Miles Kimball.

“That doesn’t mean that money can’t buy happiness-only that people don’t know how to convert time and money into happiness or that they have chosen other things instead,” Kimball says. “Our complex, modern lives offer greater potential than ever for us to be happy, as long as we sacrifice money for the sake of time and put enough time into the things that will make us happy.”

The connection between wealth and happiness is complex, very rich people still rate substantially higher in satisfaction with life than very poor people do, even within wealthy nations.

“There is overwhelming evidence that money buys happiness,” said economist Andrew Oswald of the University of Warwick in England.

Expect to see much more research on happiness in the near future. This is a topic that no one is against, but still needs a bit more work before our leaders are willing to hang their hats on it.

So there will be a happiness index in your future. We recommend that they start by doing a “happiness impact study” on the IRS code.