Gross National

Happiness
GNH Indicators
WHAT is GNH?
 Gross National Happiness: Its an indicator that measures quality
of life or social progress in more holistic and psychological terms
than gross Domestic Product (GDP).
 The term was coined in 1972 by Bhutan's former King Jigme
Singye Wangchuck to signal his commitment to building an
economy that would serve Bhutan's unique culture based on
Buddhist spiritual values
 The concept was taken seriously, as the Centre for Bhutan
Studies, under the leadership of Karma Uru, developed a
sophisticated survey instrument to measure the population's
general level of well-being
Indicators of Development
 Across the world, indicators focus largely on market transactions,
covering trade, monetary exchange rates, stockmarket, growth, etc.
 These dominant, conventional indicators, generally related to Gross
Domestic Product (GDP) reflect quantity of physical output of a
society
 But GDP is heavily biased towards increased production and
consumption, regardless of the necessity or desirability of such
outputs, at the expense of other more holistic criterion.
 It is biased against conservation since it does not register
conservation or stocks.
Indicators of Development
 Indicators determine policies
 Indicators embody values
 Indicators capture the imagination and help convince lay people
about the direction of the country’s goals and development
objectives.
 Indicators actually drive society in certain directions and even
determine the policy agendas of governments
 As many contemporary indicators of progress and development do
not reflect GNH adequately, the Royal Government of Bhutan
directed the Centre for Bhutan Studies (CBS) to develop GNH index,
which will provide appropriate indicators for Bhutanese
development.
WHAT IS HAPPINESS?

 It is a public good, but felt subjectively

 It depends partly on frames of reference, relative
 It is relational in character
 It arises from both external stimuli and inner contemplative methods
 Its meaning changes with sensitivities and understanding of
interdependence
 It is the ultimate value in general
GNH as an indicator
 Although GNH is a complex concept and ideal, for practical
application, GNH philosophy had to be translated into a metric
system. Without a formal Quantitative measure the measurement of
Happiness is not feasible.

 Left at the level of inspirational discourse, imprecision will allow

many conventional indicators to play unwitting roles in a GNH
society. This will destroy the whole idea of coming up with an
alternate idea of measuring People’s development and Quality of life.
Domain Contribution- GNH INDEX
GNH by Region
GNH by income Level
GNH indicators -Benefits.
 GNH indicators can become tools of accountability.
 The sense of common purpose embodied in a coherent set of
indicators enables ordinary men and women to more readily judge,
hold accountable their leaders, by checking whether these the
targets are being fulfilled.
 Without a common vision concretized through indicators, each
individual merely looks to his or her own ends, even though welfare
is a shared pursuit.
 Not only do GNH indicators assist in building vision, they are
instrumental to that vision being held in common by all citizens,
building a notion of greater interdependence across time and over
space.
 Once people are familiar with GNH indicators, they can have a
practical effect on consumer and citizens behavior.
GNH indicators -Benefits
 This potential behavior changing function of GNH indicators can be
valuable. For example, certain indicators for GNH gauge the
prevalence rates of negative and positive emotions, from
compassion to anger.
 The level of trust, volunteerism and safety can also be tracked.
Information on their prevalence rates will influence peoples behavior
as they begin to gauge their own traits against the national trends.
 In the case of using GNH indicators as evaluative tools, they can be
used not only to check whether programs are consistent with GNH
indicators but also to create conditions for a coherent, organic
relationship between professed values on the one hand and actual
policies, programs and projects on the other.
GNH in Policy Making
GNH indicators -Limitations
 To qualify as a valid indicator of GNH, an indicator with respect to
any variable has to have either a positive or a negative influence on
well-being and happiness.
 The direction of causality on happiness and well-being must be
clear. For examples, less crime, illness, and air pollution have a more
positive influence on happiness than more crime, illness, and
pollution.
 GNH indicators include both objective and subjective dimensions of
life
 It must be understood that the subjective versus objective distinction
is merely a heuristic device that does not in any fundamental sense
represent what is basic to the nature of reality.
GNH indicators -Limitations
 Happiness itself dwells in the experience of quality of relationship.
Thus, the various domains are not simply separate conditions of
happiness in and of themselves. Rather, it is the intimate inter-
relationship among these domains that is significant.
 During the consumption of goods and services, the measure of what
gives the people happiness will be relative, either to what others are
consuming or to what one had the year before.
 This fact implies that there are negative externalities to happiness
associated with consumption that needs to be curbed.
 There could be different model explaining Happiness:
 One model is that happy and pleasurable feelings are seen as
dependent solely upon external stimuli.
 This will lead individuals to believe that being materialistic will
increase their happiness
GNH indicators -Limitations
 Other Model presents that the mental faculties can be trained
towards happiness. From a contemplative perspective, extreme
reliance on externally derived pleasure distracts the individual from
inner sources of happiness, elevating the latter.
 When this cultural view is applied, stable and sustainable economies
can be termed successful.
Bhutan – Measuring Happiness
Happiness Survey for Developing GNH Indicators

 The pilot survey questionnaire, which was found to be too lengthy,

was pared down to a questionnaire that took half a day to interview
in the final survey carried out from December 2007 to March 2008.
 The survey was carried out in 12 of the 20 districts.
 A total of 950 respondents were interviewed in the 12 districts. The
questionnaire covered the key areas affecting the values and
principles of GNH, roughly divided into the domains of psychological
well-being, health, time use, education, culture, good governance,
ecology, community vitality and living standards.
 The questionnaire consisted of a mixture of objective, subjective,
and open-ended questions. (A total of 180 Questions)
Bhutan – Measuring Happiness
Dimensions and Indicators of GNH

The single number GNH index and its component indicators provide
Bhutan with three different levels and types of indicators:
 GNH status indicators. Hundreds of such indicators have already
been calculated from the primary data.
 GNH demographic indicators. These indicators show distribution of
GNH dimensions across different social, economic and demographic
groups.
 GNH causal and correlation indicators.
 Question Type like “would you say you are: Very happy, Rather
happy, Not very happy, or Not at all happy.” or how would you rate
yourself? One is not a happy person and 10 is a very happy person.
Bhutan – Measuring Happiness
The GNH indicators have been designed to include nine core
dimensions that are regarded as components of happiness and well-
being in Bhutan , and are constructed of indicators which are robust
and informative with respect to each of the dimensions.
 Psychological Well-being
 Time Use
 Community Vitality
 Culture
 Health
 Education
 Environmental Diversity
 Living Standard
 Governance
Bhutan – Measuring Happiness
 Psychological
The domain of psychological well-being as an end includes
satisfaction with all elements of life, life enjoyment, and subjective
well-being. Indicators include: General psychological distress
indicators, Emotional balance indicators etc.
 Time Use
The domain of time use is one of the most effective windows on
quality of life, as it analyzes the nature of time spent within a 24-
hour period, as well as activities that occupy longer periods of time.
An important function of tracking time use is to acknowledge the
value of non-work time for happiness.
 Community Vitality
The domain of community vitality focuses on the strengths and
weaknesses of relationships and interactions within communities.
Indicators include Family vitality indicator, Safety indicator etc.
Bhutan – Measuring Happiness
 Cultural Diversity and Resilience
Maintenance of cultural traditions has been one of Bhutan’s primary
policy goals, as traditions and cultural diversity contributes to identity,
values, and creativity. Indicators include Dialect use indicator, Traditional
sports indicator, Community festival indicator etc.
 Health
The health indicators assess the health status of the population, the
determinants of health and the health system. Indicators include Health
status indicator, Health knowledge indicator.
 Education
Education contributes to the knowledge, values, creativity, skills, and
civic sensibility of citizens. A domain such as education is not intended
merely to measure the success of education in and of itself, but rather to
assess the effectiveness of education in working towards the goal of
collective well-being. Indicators include Education attainment indicator
etc.
Bhutan – Measuring Happiness
 Ecological Diversity and Resilience
By examining the state of Bhutan s natural resources, the pressures
on ecosystems, and different management responses, the domain of
ecological diversity and resilience is intended to describe the impact
of domestic supply and demand on Bhutan s ecosystems. Indicatorsi
include Ecological degradation indicator, Ecological knowledge
indicator etc.
 Living Standard
The domain of living standards covers the basic economic status of
the people. The indicators assess the levels of income at the
individual and household levels, sense of financial security, room
ratio, food security, house ownership. Indicators include Income
indicator, housing indicator etc.
Bhutan – Measuring Happiness
 Good Governance
The domain of good governance evaluates how people perceive
various government functions in terms of their efficacy, honesty, and
quality. Indicators include Government performance indicator,  
Freedom indicator etc.
Bhutan – Measuring Happiness
 Method for GNH Index Construction
The Gross National Happiness Index (GNH) is constructed in 2 steps,
one of which pertains to identification and one to aggregation.
1. Identification
The first step is to define whether each household has attained
sufficiency in each of the nine dimensions. This is done by applying
a sufficiency cutoff to each dimension.
 Sufficiency Cut-off
The first part of the Gross National Happiness measure applies a
sufficiency cutoff to each indicator. The sufficiency cutoff is set,
naturally, at a higher level than a poverty line.
A person is identified as having a sufficient quality of life if his
or her achievements in that indicator meet or exceed the cutoff. If
the achievements do meet or exceed the cutoff, the persons actual
achievements are replaced by the sufficiency level
Bhutan – Measuring Happiness
 The value of each indicator in which a household attains sufficiency
or above sufficiency is given a 0.
 Subsequently all achievements that are less than sufficient are
replaced by the distances from the cut-offs. It is calculated by
subtracting the actual achievement from the sufficiency cutoffs, and
that difference is divided by the sufficiency cutoff itself.

How do we identify who is happy?

 Any shortfall from sufficiency that any household experiences in any

indicator within any dimension is considered to depress Gross
National Happiness. A person who has achieved sufficiency in all 9
dimensions is considered happy.
Bhutan – Measuring Happiness
2. Aggregation
 The second step is to aggregate the data of the population a
decomposable measure that is sensitive to the depth as well as
severity of achievements.
 first we identify the shortfalls from gross national happiness and
calculate the squared distances from the cutoffs. The resulting
measure is the GNH.
GNH = 1- Average squared distance from cutoff
 Break Down by Dimension
 The number of indicators in each of the nine domains is different
and so, in order to avoid biasness the domains are attached with
equal weights. For eg. psychological wellbeing consists of 11
indicators. Each of the 11 indicators would be assigned a weight of
1/11. The domain index would then be 1- Average squared distance
from cutoff for 11 indicators.
In SUM
How can we make sense of the GNH measure?

 First, we compare the GNH in different districts surveyed, to see which

districts have higher GNH scores.
 Second, we can compare the GNH across time to see if GNH is decreasing
or increasing after we conduct future surveys.
 Third, we decompose the GNH by dimension (or indicator), by district, by
gender, by occupation, by age group etc. In this way we can see how
shortfalls in GNH vary across disaggregated levels. This information reveals
immediately in what dimensions of life shortfalls from sufficiency are most
acute.
 Fourth, we track the decomposition of GNH across time, to see in which
dimensions sufficiency is increasing, and also to track whether or not it is
decreasing in any dimensions.
 Fifth, we study the average severity of deprivations, to identify whether the
gap below the sufficiency cutoff is deepening or narrowing across time.