Beyond GDP: Day One, Part Two

The day continued with Professor Bruno S. Frey, Economic Policy and Non-Market Economics, University of Zurich, getting the room fired up about measuring happiness. His message was that happiness is the best measure of wellbeing, and that happiness can be measured with very valid measures. Six or seven years ago, measuring happiness seemed to him like it was impossible to do; today, with the extent of research in the field, happiness measures are more valid than the GDP.

Happiness, or life satisfaction, is a more meaningful measure than national income or the Human Development Index. But government policy should NOT be to maximize happiness; instead, it should be to enable people to reach happiness.

The first surprising result of the research is that most people are happy. When asked the question, "Taken over all, how satisfied are you with the life you lead?", most people answer somewhere between 6 and 8 on a 10-point scale. Happiness (or life satisfaction) indicators are a good proxy for individual welfare (high validity). We have good research fro, the World Value Survey, Eurobarometer, and brain scan research.

In the meantime, ,any of our "objective" measures are not very good. 50 to 60 percent of national income is attributed to government activity in many countries, which may have little to do with well-being. HDI is not good -- life expectancy is good, but only if the added years are happy ones. School enrollment is not an output. Income per capita is not an indicator of well-being -- he showed here a graph contrasting real GNP increases over time against a static happiness measure.

What does this mean for public policy? Government should NOT try to maximize happiness. We cannot be naive. Government will try to manipulate the measure. In addition, it draws attention away from the things that should matter to governments -- justice, responsibility, solidarity. Government SHOULD enable people to reach happiness, by focusing on education, general economic conditions (unemployment is the worst thing for unhappiness), environment, political conditions; Citizen participation rights and decentralization are important -- the more people participate in politics, the more satisfied they are with their lives.

Hans Rosling, Professor of International Health, Karolinska Institute, Sweden, presented next. If you haven't seen him present, go right now to http://www.gapminder.org/ to see him in action. Still here? Dr. Rosling began by showing sheet music from Chopin, and asked if we could tell how beautiful it was. A composer, who specializes in this, can look at the notes and see the beauty. We couldn't, because all we could see were the notes -- we needed an instrument and someone to play it. Even an electronic keyboard, would help -- they're inexpensive and a child can play them. Too often we get excited about statistics, but all we present to the public are the notes, not the music.

There are two major target groups for Gapminder -- children and heads of state. Analysts play the music in their heads already. He showed the gapminder tool, which is tremendous, then offered these points about what the world needs in a data tool:

• Unified format is very important
• Search function
• Design
• Interactivity
• Storytelling

How do we get there? Innovation, which requires many ideas, new technology, investment, and data access. The problem isn't the ideas, or the technology, or the funding. It's access to data. We need to develop a standard data access license so that the data can be available. We get too caught up in DbHd -- Data Base Hugging Disorder -- if we can solve this, we can get the data out.