Why Global Leaders Should Pay Attention To People's Happiness

The most established national statistics focus on rational behavior, not how people feel.
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Richard Thaler’s recent win of the Nobel Prize in economics marks the third time the prize has been tied to the growing field of behavioral economics.

In addition to Nobel Prizes, this new discipline has spawned bestselling books, new agencies within governments and even new majors within universities. What it hasn’t led to, however, is new national statistics.

The most established national statistics – gross domestic product, household income and unemployment – focus on rational behavior: what people spend, how much they make, and whether they have a job. What they don’t capture is how people feel.

For more than a decade, Gallup has collected data on how citizens of the world feel about their lives. New research out today shows which countries are ready for change based on how their people’s lives are going.

Brexit shocked the world. Few experts saw it coming. In their defense, most economic indicators that they studied didn’t point to a political upset. GDP in the U.K. was growing at about 2% and unemployment had dropped to 4.9%. From an economic perspective, things seemed OK.

Another metric showed something different. In the two years leading up to Brexit, Gallup found that the percentage of people who were “thriving” (or happy) was in dramatic decline. The 15-point drop in thriving was so remarkable that it is one of the largest two-year drops in Gallup’s history of global tracking.


Brexit wasn’t the only surprise in the past year. Despite the media reporting a recovering economy, how Americans felt about their lives declined ahead of the 2016 election.


GDP pioneer and Nobel laureate Simon Kuznets cautioned using traditional economic indicators as measures of wellbeing. He said, “The welfare of a nation can scarcely be inferred from a measurement of national income.” Happiness and GDP per capita trends in Egypt during the Arab Uprisings and Ukraine during the Euromaidan Revolution show he was right.


Recent research by London School of Economics academic George Ward shows that how people feel about their lives influences how they vote in elections. He believes that subjective measures of well-being are better predictors of elections than how people feel about the economy.

Gallup’s new report, What Happiness Today Tells Us About the World Tomorrow, covers how people feel about their lives in virtually all countries worldwide. If world leaders are listening, they need to know this: Life is getting worse in Russia, India, Colombia, Egypt and Brazil – countries on almost every continent. People in each of these countries have been rating their lives worse every year since 2014.

As Thaler said, “The most important lesson is that economic agents are humans and that economic models have to incorporate that.” If that’s true, it’s time national indicators incorporate the rest of the story.

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