Does GDP make states happy?

Earlier this week Gross National Happiness USA, a national grassroots organization for which Scioto’s principal Rob Moore is president, released a landmark survey about happiness in the US. This is the first time a national survey of happiness has been conducted on four questions of happiness that have been asked in the U.K. for a decade and it offers some very valuable insights for those of us in the public policy field. 

One particularly important takeaway is that GDP per capita is not correlated with happiness. The correlation coefficient, the main statistical test for how two datasets relate to one another, between state GDP per capita and state happiness is only 0.09. This constitutes a weak relationship between GDP per capita and state happiness. Many people recognize that GDP is a way of measuring how much stuff is in an economy, not how well people are doing in that economy. Here at Scioto, we recommend the Genuine Progress Indicator (GPI) as a more complete metric to measure economic growth. Still, GDP is the most commonly used measure of the economy, and perhaps this survey is more evidence that broader measures of economic growth are needed in the policymaking world. 

Another interesting finding in the study is that among Americans, there does not seem to be a u-shaped happiness curve. The “u-shaped curve” is a widespread phenomenon in happiness that suggests people are least happy in their 40’s. It has been found in similar surveys across multiple other countries and within the U.S. In this study younger people are less satisfied with their lives than a u-shaped relationship would suggest. 

Although this finding is unexpected, Gross National Happiness speculates that perhaps the Covid-19 pandemic might be responsible, given that younger Americans reported more feelings of loneliness during the pandemic. 

The researchers also found that 45% of respondents reported that family was the most common factor people attributed their happiness to. The next most common topic reported was health, where 6.3% of respondents mentioned it. 

For policymakers interested in the happiness of people in society, this survey is a great tool to find areas for improvement. With more data like this, it will be easier and easier for researchers and analysts to include happiness as a criteria when evaluating public policy options.