Happiness Economics: Measuring Prosperity Beyond GDP


Greg Moore

In our second installment of a three-part series on Happy Communities, we delve into the intriguing world of Happiness Economics, a pivotal concept that redefines our understanding of prosperity and success in community development. Shifting the focus from traditional economic indicators like GDP, this segment explores how measuring happiness and well-being alongside these metrics offers a more holistic and meaningful assessment of a community's health and prosperity. As we navigate the nuances of Happiness Economics, we’ll examine the role community-focused development plays in fostering economic systems that value and enhance the quality of life. Join us in this insightful exploration, where we uncover the importance of integrating well-being into the heart of our economic and social policies, ensuring that our communities don't just grow in wealth but also happiness and fulfillment.

In the quest to define and measure societal success, traditional metrics like Gross Domestic Product (GDP) have long dominated the discourse. However, a growing movement known as Happiness Economics is challenging this norm by advocating for the inclusion of well-being and happiness as essential indicators of prosperity. This approach underscores the notion that true wealth is not solely about economic output but also about the population's quality of life and happiness.

Redefining Prosperity: Beyond the Monetary Metrics

GDP has been the go-to measure of a nation's economic performance, focusing on the market value of all goods and services produced. However, it fails to account for income distribution among residents or the non-market activities that contribute to people's well-being. Happiness Economics fills these gaps by considering factors such as health, education, income equality, and environmental quality, which are instrumental in determining a community's overall happiness and quality of life.

Measuring Happiness: A Multifaceted Approach

The measurement of happiness and well-being is complex and multifaceted. It involves assessing subjective well-being, which includes people's own evaluations of their lives, their emotional experiences, and their sense of purpose. Various indices, like the World Happiness Report, use criteria like social support, freedom to make life choices, generosity, and perceptions of corruption alongside GDP per capita to provide a more holistic view of happiness in different countries.

Community-Focused Development: Creating Spaces for Happiness

Community-focused development plays a pivotal role in Happiness Economics. It involves designing urban spaces and policies that prioritize residents' well-being. This includes creating inclusive and affordable housing, ensuring access to quality healthcare and education, and fostering community engagement and social connections. By focusing on these aspects, communities can create environments where residents not only thrive economically but also enjoy a high quality of life.

The Role of Public Policy in Enhancing Quality of Life

Public policy is instrumental in integrating the principles of Happiness Economics into the fabric of society. This includes implementing policies that promote work-life balance, environmental sustainability, and social welfare. For instance, policies that encourage flexible working hours or parental leave contribute to the well-being of workers and their families. Similarly, investments in public transportation and green spaces both improve the environment and enhance citizens' daily lives.


Happiness Economics offers a transformative approach to understanding and measuring prosperity through the intrinsic value of happiness and well-being alongside economic growth. By incorporating these measures into our assessment of societal success, we can create more holistic, equitable, and sustainable communities. It’s about shifting the focus from wealth accumulation to creating environments where people can lead fulfilling, happy lives. As we embrace this paradigm, we pave the way for policies and developments that genuinely resonate with the needs and aspirations of people, ensuring that prosperity is not just economic but deeply rooted in the happiness and well-being of every community member.

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