The Census: can an idea that began in Buddhist Bhutan improve our lives?

From next week the Office for National Statistics (ONS) will begin collecting the data that will go to make up the nation's happiness index. It's a subject close to the Prime Minister's heart: David Cameron has been talking about this since before he won office. Simply measuring the country's economic output via gross domestic product (GDP) is no longer enough to tell him how the nation is doing. He needs an accurate happiness index as well.

"We will start measuring our progress as a country not just by how our economy is growing, but by how our lives are improving, not just by our standard of living, but by our quality of life," Cameron pronounced grandly last year. "This is something that is important to our goal of creating a more family-friendly country," he continued, namechecking "an immigration free-for-all", "cheap booze" and the impact advertising has on children as factors that impair our national happiness and wellbeing.

Judging a nation's progress by its happiness rather than just the size of its manufacturing sector and the number of households with two dishwashers has been in the ether for some time. It began in Bhutan, in 1972, when Jigme Singye Wangchuck was crowned king of the tiny Himalayan kingdom. Assessing the poor, forest-covered country's achievements purely on the basis of GDP offended his Buddhist principles and deeply held belief that economic advancement did not necessarily lead to contentment.

And so the term gross national happiness (GNH) was born. It is still a guiding principle in Bhutan, which has just launched a tourism advertising campaign with the slogan "happiness is a place". The key pillars of the policy - sustainable development, preservation of cultural values, care for the natural environment and good governance - have led the government to ban street advertising, plastic bags, MTV and televised wrestling. It seems to be working: in 2006, BusinessWeek magazine rated Bhutan the happiest country in Asia and the eighth happiest in the world. It was the only developing country in the top ten.

In the wake of the Bhutan experiment, American academics, President Nicolas Sarkozy and others have started to take happiness seriously.Tony Blair tried, but ultimately failed, to factor it into policymaking when he was PM. Cameron seems determined to try harder. His first step is to gather the raw statistics, which is why the ONS is adding four questions to its Integrated Household Survey of nearly half a million households. The biggest national questionnaire after the Census, it will now ask about life satisfaction, emotional wellbeing and how worthwhile people find their jobs and other activities. This data will be crunched in time for its next report in 2012.

The Centre for Well-being, part of the New Economic Foundation think tank, has long lobbied for government to take these issues seriously and helped frame the questions in the ONS survey. Juliet Michaelson, one of their researchers, is delighted that it is finally happening. "We are pleased, it's a good first step. It's got political backing, David Cameron made an important speech, it will be taken seriously across government. Departments will be held to account, we will be able to judge them by the performance of these figures."

Eventually she would like to see more detailed questions that would "feed into a headline measure that would become part of the country's political programme, and be taken seriously by politicians and the public. Something robust enough to stand up to the same kind of focus as GDP."

Pat Kane, author of The Play Ethic, is all in favour of happiness, culture and a better work-life balance but suspicious of a right-wing government putting it at the heart of policy-making.

"It's easy for a bunch of plutocrats to rhapsodise about how much people's lives aren't really defined by material wealth as much as 'perception of wellbeing'. The fact that they do so while inflicting an unnecessarily brutal round of public sector cuts shows how delusional - or heedlessly arrogant - they are in thinking they could ever be on top of a 'happiness' agenda."

Not everyone is convinced about the methodology. Alan Walker, professor of social policy at Sheffield University, argues that "happiness is a non-scientific concept, like beauty, and very much a matter of personal taste". He thinks that the "ONS has been stuck with an essentially political task. It will do it skilfully but it will be impossible to complete it successfully without varying the brief.Because happiness is such an individual topic, a general population questionnaire will tell us very little."

There is also, says Walker, the risk that the statistics can be spun: "This happens regularly with crime statistics and we all remember the 30 or so changes in the definition of unemployment in the 1980s/90s, all of which reduced the total."

So how will an idea born in a sparsely populated Buddhist absolute monarchy on the other side of the world translate in Scotland, the nation Jesus bypassed in his search for sunbeams? Kane may have problems with David Cameron's rationale for measuring happiness but he doesn't see a shortage of the commodity itself. We are not, he insists, a dour and cynical bunch who need nothing more than a plate of porridge and a good long sermon to keep our spirits high.

"I think in Scotland we have an asset that England lacks: a positive, progressive, optimistic, even futuristic version of national identity. We've had it for 30 years, even since Alasdair Gray's great appeal to 'work as if you live in the early days of a better nation'. We have the potential to tap into a collective spirit of wellbeing through sport, culture, heritage, our media. We are not seething with a sense of resentment and lost status in the way that post-empire England is."

He sees it as a devolved issue, nurtured by growing national self-confidence. "Much of the appeal of political nationalism in Scotland is about hope and vision. The steady journey towards independence is one of the biggest boosts towards national happiness that you could devise.

"It's never," he admits, "going to be all Californian happy-clappiness in Scotland. We need a good dash of minatory pessimism to strengthen our happy outlook."

Good luck to the ONS in finding a way to measure that.