The price of happiness

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In the past few years, economists and social scientists have made great strides in developing well being and development measurements. Starting from Morris D. Morris’s Physical Quality of Life Index, later refined to Human Development Index by Mahbub ul haq and Amartya Sen, to Green GDP by Joseph Stiglitz, their measurements techniques have deepened our understanding of well being beyond the traditional income dimensions. Optimistically, measurement and survey techniques used by government of Bhutan – Gross National Happiness – offers us an alternative view to look at country’s progress. Its domains range from health, education, culture, time use to governance, ecology, community and living standards. GNH’s goal is to improve happiness and create institutions, which can promote such endeavor. This paper on ‘Towards a new development paradigm: Critical Analysis of Gross National Happiness’ is an analysis of GNH and a contribution to a quite widespread debate on how to move beyond GDP. It is not intended to be a comprehensive review of the ‘state of the art’ or an update of the Stiglitz Commission’s work or Green GDP or even Gross National Happiness. Rather, it presents the following details, which may prove useful in various ways and help advance the debate and sustain its momentum. The Section 1 in this thesis gives an introduction to the idea of GDP, its criticism and followed by a problem statement. The Section 2 deals with the realm of shifts in well being and development measurement techniques to discovery an alternative to GDP. Section 3 takes one of the alternatives – Gross National Happiness (GNH) – endorsed by Bhutanese government, UN, economist like Jeffrey Sachs and analyses its domains, indicators, measurement techniques, methodology, weighing rationale and the idea of GNH. Section 4, the critical part of this thesis deals with the analysis of GNH from its advantages, shortcomings, recommendations, comparisons and areas of further research. Lastly, Section 5 raises the need of reforming policy criterion and justifies its necessity.
Recent research has begun to distinguish two aspects of subjective well-being. Emotional well-being refers to the emotional quality of an individual's everyday experience--the frequency and intensity of experiences of joy, stress, sadness, anger, and affection that make one's life pleasant or unpleasant. Life evaluation refers to the thoughts that people have about their life when they think about it. We raise the question of whether money buys happiness, separately for these two aspects of well-being. We report an analysis of more than 450,000 responses to the Gallup-Healthways Well-Being Index, a daily survey of 1,000 US residents conducted by the Gallup Organization. We find that emotional well-being (measured by questions about emotional experiences yesterday) and life evaluation (measured by Cantril's Self-Anchoring Scale) have different correlates. Income and education are more closely related to life evaluation, but health, care giving, loneliness, and smoking are relatively stronger predictors of daily emotions. When plotted against log income, life evaluation rises steadily. Emotional well-being also rises with log income, but there is no further progress beyond an annual income of ~$75,000. Low income exacerbates the emotional pain associated with such misfortunes as divorce, ill health, and being alone. We conclude that high income buys life satisfaction but not happiness, and that low income is associated both with low life evaluation and low emotional well-being.