The GDP is the most commonly used standard to measure the growth and development of countries. It has many flaws such as the exclusion of variables like the quality of life. Another factor that is also widely recognized is the Human Development Index (HDI). It measures the average of income measured by GDP, health measured by life expectancy and education measured by literacy/enrollment. Similar to GDP, the HDI is also not a complete representation of all aspects of growth and development of any economy since it ignores variables such as the quality of life, the relationship between current income and growth, etc.

The London-based independent think-and-do tank New Economics Foundation(NEF)  developed a new measure called the Happy Planet Index (HPI) back in 2006. It measures “the ecological efficiency with which human well-being is created around the world. The HPI reflects the average years of happy life produced by a given society, nation or group of nations, per unit of planetary resources consumed. Put another way, it represents the efficiency with which countries convert the earth’s finite resources into well-being experienced by their citizens. The Global HPI incorporates three separate indicators: ecological footprint, life-satisfaction and life expectancy.”

HPI = (Life Expectancy x Life Satisfaction)/Ecological Footprint

where Life Satisfaction is calculated based on surveys and others are hard variables.

According to this index, Costa Rica is the happiest country in the world. The USA stands at 114 just one step above Nigeria and one rank below Madagascar.

The 2009 Happy Planet Index Rankings are shown in the graphic below:

Click to Enlarge

Rich countries fall in the middle of the rankings. The Netherlands is the highest ranked among Western countries and comes in at 43. Similar to Costa Rica, many of the countries that top the list are small islands including Jamaica, Dominican Republic, etc.

A few important take-aways from the THE ^UN HAPPY PLANET INDEX 2.0 report are:

• No country successfully achieves the three goals of high life satisfaction, high life expectancy and one-planet living.
• Whilst most of the countries studied have increased their HPI scores marginally between 1990 and 2005, the three largest countries in the world (China, India and the USA) have all seen their HPI scores drop in that time.
• It is possible to live long, happy lives with a much smaller ecological footprint than found in the highest-consuming nations.
• More dramatic is the difference between Costa Rica and the USA. Costa Ricans also live slightly longer than Americans, and report much higher levels of life satisfaction, and yet have a footprint which is less than a quarter the size

In the executive summary the authors of the report write “In 2008, Americans voted for ‘change’ and ‘hope’ above else.” With one year in office, is our President Obama fulfilling their expectations?