For as long as most of us can remember, we have taken growth in per capita gross domestic product as the best measure of human progress. But now, there is growing talking of gross domestic happiness, and how that might be measured. As well as GDP, we may soon have a GDH.
For some years, Statistics Canada has measured life satisfaction through its General Social Survey and its Canadian Community Health Survey, and most Canadians — about 92 per cent — have reported that they are satisfied or very satisfied with their lives. According to the 2009 Happy Planet Index, Canadians ranked fifth in happiness, compared to Americans, who ranked 7th. The happiest people were found in Costa Rica, followed by Denmark and Norway.
Now the focus is on what accounts for satisfaction and to what extent, as a new study by the Centre for the Study of Living Standards asks, “does money matter” or what is it that determines the happiness of Canadians is. From this follows the question of what implications these findings may have for public policies and the provision of public goods.
In its study, the Centre for the Study of Living Standards found that among the most significant determinants of individual satisfaction with life in Canada were an individual’s perceived mental health, an individual’s perceived health status, whether or not the individual lived and worked under conditions of stress, and an individual’s sense of belonging to his or her local community.
Being unemployed, not surprisingly, had a negative impact.
And money mattered since increased household income did contribute to increased satisfaction but not by as much as might be expected.
Living in poverty or facing old age with no pension would also be considerations; Canadians who were married were happier on average than those who were not; recent immigrants were less happy than native-born Canadians; and minority groups were less happy than Canada’s majority group.
Comparing levels of satisfaction across Canada, the centre found that differences in the sense of belonging to a local community made a big difference. This may explain why the least satisfied Canadians lived in Vancouver and Toronto, where a feeling of community may be harder, stress more prevalent, and minority groups are prevalent and dissatisfied. Smaller communities may be better suited to community engagement and community spirit.
The focus on satisfaction, the subject of a recent Ottawa conference, has been given a push, first of all by French President Nicolas Sarkozy who, in 2008, asked Nobel economists Joseph Stiglitz and Armatya Sen to study the issue. They issued their report just over a year ago. Since then, Sarkozy has been pushing for better measures of social and economic progress. More recently, British Prime Minister David Cameron has asked the Office of National Statistics to produce an index of well-being.
One of the world’s top experts on the subject is Canadian economist John Helliwell, who is advising the British on how to proceed. Helliwell is also continuing his research through the Canadian institute for Advanced Research program on social interactions, identity and well-being.
In a May speech on “the economics of happiness,” U.S. Federal Reserve Board chairman Ben Bernanke dismissed the idea that wealth and income are unimportant.
Wealthier countries have more resources for medical care, good nutrition and sanitation, as well as workplace safety; so that wealthier countries should have longer life expectancy, lower infant mortality rates and better health outcomes. Likewise, wealthier countries are more likely to have clean air and water.
So money can contribute to happiness and satisfaction. But that is not enough.
“Happy people,” Bernanke said, “tend to spend time with friends and family and put emphasis on social and community relationships.” In addition, satisfaction is related to the ability of people to control their own lives.
From a policy point of view, what all of these findings mean, Bernanke said, was that policymakers “should pay attention to family and community cohesion. All else equal, good economic policies should encourage and support stable families and promote civic engagement. At the same time, policies should give individuals, families and communities to make their own decisions wherever possible.”
In the end, GDP is not an end in itself. The goal of public policy should be to help ensure a satisfying life. But having a prosperous economy with good jobs and opportunity, and the public goods — from health and education to culture and recreation — that wealth supports remain important.
David Crane is a syndicated Toronto Star columnist. He can be reached at crane@interlog.com.