Why Everyone’s Trying to Measure Well-Being

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It’s mid-afternoon, and I’m sharing a long lunch with a colleague at a sidewalk café in Paris. There’s a basket of fresh-baked bread on our table and a parade of well-dressed shoppers passing by. At the next table, three men bask in the sunshine, chatting over a bottle of chilled Champagne. Children whizz by on their kick-scooters, headed for the park.

In other words, this is a really miserable place.

Americans might dream of visiting Paris — France is the world’s most visited country — but to the locals, there is plenty to whine about, and they do, to an extreme extent, according to the statistics. Demonstrations snarl traffic every few days, and last year a Gallup International poll ranked the French the most pessimistic among 51 countries; another Gallup poll, taken days before grumpy voters turfed Nicolas Sarkozy out of office on May 6, found that most French believed their lives were sure to get worse in the next five years.

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There is a point to this anecdote: It is difficult for outsiders to gauge people’s sense of well-being, simply by viewing their lives. And yet despite the difficulty, economists seem increasingly determined to do just that, by trying to wrestle life’s intangibles into measurable data.

Forty years after the Gross National Happiness index was invented by the King of Bhutan, happiness is finally gaining traction as a serious national indicator. Last week, economists at the Organization for Economic Cooperation and Development (OECD), which represents 34 major economies, told a packed auditorium in Paris that they hoped their Better Life Index — launched a year ago — would persuade governments to focus as much on factors like environment and community cohesiveness, as on GDP measurements like productivity and income. “The index of material conditions is still extremely important,” the OECD’s chief statistician Martine Durand told the audience of about 350 people, including economists and officials from around the world. “But what we are saying is that there is more to life than just money.”

That’s a good thing, given Europe’s mountainous debt and near-zero growth. While the Eurocrisis threatens to derail the global recovery, more and more governments are measuring non-traditional data, perhaps in order to see how their citizens fare with unemployment and strained public services, and also — some officials assert — because the findings could help predict economic downturns sooner than changes in GDP. Former World Bank chief economist Joseph Stiglitz, who was commissioned by Sarkozy in 2009 to devise a well-being index, found that such data might have alerted the West to the impending global recession, had it existed in the mid-2000s.

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Now several countries seem to have taken note. The U.S. Department of Health and Human Services is working on a national happiness index for Americans (whose “pursuit of happiness,” the Washington Post noted, is fundamental to the country) that the U.S. would then track, much as it does income and working hours. And last year, in the midst of massive spending cuts, Britain’s Office of National Statistics began a Well-Being Index, at a cost of $3 million a year, collecting statistics on people’s levels of anxiety and confidence. Surprisingly, the first index showed Brits being generally happy with life, with older people being happiest of all.

But no effort seems to match the ambition and scope of the OECD’s Better Life Index. Launched in May last year, it collates statistics in 36 countries (Russia and Brazil signed on this month) on 24 indicators; as of this year, those include gender and inequality. There are factors on the list that seem tricky to quantify, like “work-life balance,” and “life satisfaction,” as well as the more obvious ones like education, health, and income.

Having worked for years to design the index, OECD statisticians then confronted the complexities of measuring factors which were subjective and vague. So they launched an online tool called “Your Better Life Index,” allowing people anywhere to rank how important each factor on the list is to them, and then compare how their ideal stacks up against real-life statistics. In effect, the Better Life Index is now whatever each person decides it should be. If education is the most important thing to you, go live in Finland, not Mexico; if work-life balance is most important, Denmark is your place, while the U.S. ranks near bottom.

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So far, about a million people in about 180 countries have used the tool, whose graph is designed like a bunch of flowers, in which each petal is a different indicator, growing and shrinking according to the results. “We’re asking regular people what’s important to them, and then combining that with countries’ official statistics,” says OECD statistician Rumina Boarini, who helped design index.

Though the results from the index’s first year show that people in richer countries have a better sense of well-being that those whose daily life is a struggle (no surprise), Boarini says they also suggest how limited GDP is as a country’s key economic measurement. “Policy makers need to focus not only on economic growth,” she says. “But there are many things that matter to people, which make people happy.”

And in France, despite the fine cafés and languid lifestyle, there are apparently plenty of things that cause dissatisfaction, too.

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