An index doesn’t bring happinessStatistics Korea (Kostat) announced on Wednesday that it would ?create a national happiness index as the existing statistics on gross domestic product ?are not sufficient to make the country a happy place to live. In fact, GDP has its limits. Simon Kuznets, a Russian-American economist who put GDP to practical use in 1934, acknowledged that shortcoming. He said, “The welfare of a nation can scarcely be inferred from a measure of national income.” In fact, even when a natural disaster results in serious casualties, a boom in restoration-related industry would lead to an increase in GDP.
Purchasing power parity adjusts the misleading reality projected by GDP. The most notable is the Big Mac Index, which measures the level of living standards based on the price of the hamburger sold at the McDonald’s chain. A happiness index may be the second revised indicator of GDP. Former French President Nicolas Sarkozy was most active in developing a happiness index at the government level. In 2008, he commissioned two Nobel Prize-winning economists to come up with a way to measure happiness. But partly because his term ended, and also because the index is not easily defined, a visible result is yet to come.
The most well-known happiness index is the Gross National Happiness, or GNH. It was a concept that began in Bhutan, which aspires to become a poor yet happy country. Bhutan’s fourth Dragon King, Jigme Singye Wangchuck, said in 1974 that GNH was more important than GDP. The country with a per-capita national income of $2,000 measures GNH every two years and makes it an administrative objective. The attempt of Statistics Korea is ?an extension of supplementing GDP. There is no reason to criticize its intention to pay more attention to well-being and happiness. However, what worries me is that the agency is approaching the development of the index as it calculates GDP. Ironically, we want to measure happiness because we are not happy. We are struggling because we are trying to measure the immeasurable. When quantity, not quality, of happiness is measured, it may result in yet another index estranged from reality. It is not easy to come up with a fair way to calculate a happiness index any better than GDP, since a happiness index would inevitably reflect subjective satisfaction.
Instead of wasting energy on creating a new indicator, it would be better to make public more primary data of existing statistics, including GDP. As experts and the media dissect, investigate and analyze the data, we may be able to find more clues about why we are so unhappy. It also works well with the spirit of the time?. If gathering resources, making a system and producing a result was the way of the growth-driven era, the solution in the age of happiness can be found by sharing statistics and communicating with one another. We need democratization of statistical data first.
Another pitfall of a happiness index is that an indicator is bound to lead to comparison. Once the index is announced, we will work so hard to catch up with the countries with a higher happiness index. We may be faced with temptations. It is widely believed in academia that Bhutan’s GNH was fabricated to highlight the achievements of the king. When the king of Bhutan came up with GNH, he was only 19 years old. Not having a happiness indicator does not make us any more unhappy. So let’s not blame GDP, for it has done nothing wrong.
By Kim Young-hun
* The author is a deputy business news editor of the JoongAng Ilbo.