Analysis: Measuring well-being is one thing, increasing it is another

First it was Nicolas Sarkozy. Now David Cameron has jumped on the happiness bandwagon. Yesterday he announced a £2 million plan to measure the UK's happiness.

In 2009, Mr Sarkozy commissioned Nobel prize-winner Joseph Stiglitz, who has also advised the Scottish Government, to investigate national well-being in France.

The aim was to see whether government policies should be measured not only in terms of their contribution to GDP but also how they develop "national well-being".

Earlier this year, the US National Academy of Sciences also started to look at alternatives to GDP for measuring national outcomes.

And now Mr Cameron wants his government statisticians to measure happiness.

They will have no shortage of guidance. There is a huge academic literature on this topic, even a Journal of Happiness Studies. The most common approach to measuring happiness, or subjective well-being, as it is also known, is to ask a simple question. The usual wording is: "How dissatisfied or satisfied are you with your life overall?"

People answer on a scale, often from one to seven, where one is truly miserable and seven is deliriously happy.

But the key question is whether money makes you happier. In 1974, economist Richard Easterlin wrote a paper with the title Does Economic Growth Improve the Human Lot?" He argued that within any one country, the rich report being happy, while the poor are less happy.

But, for industrial countries happiness doesn't vary much with national income per person.

Although income per person rose steadily in the US between 1946 and 1970, average reported happiness did not really improve and actually declined between 1960 and 1970. It may be that it is not how much income people have that affects their happiness, but how much they have in relation to others.

So what does this mean for Scotland? The British Household Panel Survey, funded by the Economic and Social Research Council, has asked a question about subjective well-being throughout the UK since 1991.

On the scale of one to seven, the most common answer among Scots is five.

Average scores for 1998, 2003 and 2008 in Scotland and England are shown in the graph above.

It shows that the average score in both countries dipped in 2003, but had risen again by 2008.

The differences between the nations are relatively small, but Scotland comes out just ahead of England in 2008. In 2008, Scots were slightly happier than in 1998, before devolution.

It is too early to tell whether the recession and government cutbacks have had a negative effect on the national psyche.

Although the differences between the component parts of the UK are small, there are sizeable differences between countries when you cross the channel.

Paradoxically, the further south you go, the less happy are the natives.As with many other metrics, the Vikings are at the top of the happiness league.

National well-being may be measurable, but will it respond to government policy? Most policies only make small changes to individual lifestyles, so dramatic change is unlikely.

The SNP government places "sustainable economic growth" on top of its priorities.

Previous administrations also placed economic growth at the top of their list of objectives.

It will now be interesting to see whether party manifestos for the May 2011 Scottish election are influenced by the thinking of Mr Cameron and Mr Sarkozy.