Current Account

The Economics blog

If we want a new economy what we measure matters

Is a good country a rich one, or a happy one?

By Juliet Michaelson Published 14 June 2012 9:29

A Costa Rican frog sits on a leaf. It is probably very happy. Photograph: Getty

A Costa Rican frog sits on a leaf. Judging by the statistics, it is probably very happy. Photograph: Getty Images

As the economic crisis deepens into a global recession, all eyes are glued to GDP figures. This is understandable. GDP measures economic activity and whether the economy is growing, which crucially tells us how many jobs there are.

But there’s a lot that these numbers don’t tell us about economies: like whether they are leading to better lives for the people that live in them, and whether those lives are sustainable into the future. If the last few years of economic calamity have taught us anything, it’s that economic indicators are too important to be left just to statisticians and economists to ponder.

Today nef (the new economics foundation) publishes the Happy Planet Index. It is a measure of sustainable well-being that ranks countries based on how long people live, how happy they are and the size of their ecological footprint. The index is about efficiency – countries score well by maximising the happiness they create per unit of environmental input.

If you rank countries based on this efficiency, rather than economic output, the most successful nation in the world is Costa Rica. Costa Ricans have higher average life expectancy and reported well-being than people living in the United States, and the country’s Ecological Footprint is one third the size of the US (which ranks 105th). The UK comes 41st, ahead of other EU countries but behind most Latin American and Caribbean nations.

The full data is available to explore at www.happyplanetindex.org. None of the top ten countries ranked by overall HPI score are among the world’s richest – in fact amongst the top 40 countries by overall HPI score, only four countries have a GDP per capita of over $15,000. The highest ranking Western European nation is Norway in 29th place, just behind New Zealand in 28th.

The HPI results provide evidence for something we instinctively know to be true – that progress is not just about wealth, and that it is possible to live both happily and sustainably. They show that while the challenges faced by rich resource-intensive nations and those with high levels of poverty and deprivation may be very different, the end goal is the same: to produce happy, healthy lives now and in the future.

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6 comments

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Tue, 2012-06-19 15:31 — Alanna Cohen

My comment should not be on this page (it goes with rebecca omanira oyekanmi's article on what it means to be british) it's just here due to a mildly unfortunate episode where the computer won control over the situation and now I don't know how to get rid of it

Fri, 2012-06-15 01:12 — Merc (not verified)

WHO OWNS THE BANK OF ENGLAND? Us, the Government?

WHO DOESN'T OWN THE BANK OF ENGLAND? Us, the Government?

WHO OWES THE BANK OF ENGLAND? Us, the Government

Thu, 2012-06-14 21:03 — Alanna Cohen

You have to believe in the light at the end of the tunnel, at least until you get there. Hope does a lot to help people through some incredibly difficult stuff. Of course they will probably have to re-evaluate their situation when they arrive, or maybe Britain really does treat migrants better?
I don't know enough about migrants in the rest of Europe to really judge that.
It would be nice if the ideals of tolerance and liberalism were true, maybe we should do everything in our power to make them real - then we could be truly proud of our Britishness.