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Happiness as an alternative to GDP and a measure of sustainable development

The Brundtland commission in the 1980s introduced the idea of sustainable development. Sustainable development is defined as development which provides for the current generation but does not limit the ability of the future generations to cover their needs. It is also defined as environmentaly friendly, more socially acceptable (equality) economic growth and development (The Brundtland report, 1987). There are three major components of sustainable development: environmental, economic and social. Only fundamental reorientation in all three areas can lead to successful sustainalble development. In order to successfully implement the model of sustainable development, also a suitable measure of it has to be developed and embraced. Namely, GDP has often been criticized, not only for the fact that it does not measure well-being, but also because it does not include many important elements, including environmental damages (Stiglitz et al., 2009 ; OECD, 2006 ; Talberth in Bohara, 2006 ; Stockhammer et al., 1997 ; Boyd, 2007). Several alternative approaches to measuring well-being developed. Human development index, prepared by the UN and World Bank, is probably the most renowned. But it provides only a partial measure of sustainability, as it neglects it environmental dimension. Also other indicators have been developed: genuine savings, wealth index (both World Bank), genuine progress indicator and other. As alternative to GDP also economics of happiness emerged. Economics of happiness started its development in 1970s with the Easterlin's contributions (1974), stressing the absence of impact of income on happiness. Happiness is a category that depends on three broad sets of factors: (1) personal, (2) economic and (3) social (Frey and Stutzer, 2002). Given that the general direction of economic and institutional development in the society is determined with the preferences of the society, we believe that happiness analysis provide very good foundation for: (1) to measure the readiness of the society to embrace the idea of sustainable development and (3) measurement of well-being in such a model. The purpose of the article is therefore to: 1. analyze the GDP as a measure of well-being in a sustainable development model ; 2. analyze the determinants of individual happiness, and focus on the impact of sustanable development elements on happiness ; 3. based on existing literature determine, what kind of value system, which determines the happiness determinants is most appropriate support for implementation of sustainable development.

economics of happiness; GDP; sustainable development

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