Is happiness a better measure of growth?
Happiness economics presents a new perspective.
Being happy may be considered to be the everlasting purpose of life. What gives us a smile should be cherished and events which tickle us heart should be remembered. So why isn't happiness a more credible measure of economic growth in most countries?
Numerous countries use measures such as GDP, GNP and Real Income to evaluate the economy of a country. It may seem important to economists and the government, but for the general public, do they really care about figures which merely affect their lifestyle or daily life? This is where happiness economics comes into play.
The Gini coefficient is a measure primarily used to measure the income inequality/equality of a country. With 1 (or 100) being used to represent perfect inequality and 0 being a symbol of perfect equality, countries are ranked based on their levels of inequality. Returning to the idea of happiness, this index should correlate strongly against the state of happiness in which people share.
Theoretically, those living in countries with lower income inequality would have a lower Gini coefficient and those in high rates of inequality are countries with high Gini coefficients. And it should make vivid sense for if the gap between the rich and the poor is to be wide, there would be an uneven distribution of wealth. With this index, many economists are able to analyse and understand the inequalities of certain countries, devising plans to overcome and eradicate poverty and a lack of even wealth distribution.
What it means to us?
Traditional economics has been fixed on the assumption that wealth correlates to growth, whether it be a country, an individual or a business. And as a result, most economists always focus on the standard measures with little consideration of measures for happiness. Although happiness may be a harder measure to be taken into account, it may soon be a more appropriate one.
Money isn't why we live and there are better, more fruitful ways to measure growth. An individual may have an income of well over $100,000 but after that extent, the law of diminishing returns acts upon it. One does not feel an extra sense of happiness earning $150,000 as they did with $100,000. Happiness should be prioritised before wealth. Similarly, a happy world is only made by happy individuals.