Individual well-being

If we want to measure the happiness there are four different levels that we should consider: GDP, economic well-being, individual living conditions and finally happiness.

GDP only measures the market value of all final goods and services produced within a country in a given period. GDP includes many items that don’t help well-being like depreciation, income going to foreigners, security expenditure and omits consideration of many issues like leisure time, longevity of life, income inequality, pollution, economic security, etc. So when we subtract the capital consumption, income going to foreigners and production of items that cause damage (e.g. pollution), what is left of GDP is the starting point for measures of economic well-being. Then we add non-market activity, the value of leisure and wealth, and subtract the cost of unemployment and income insecurity.

Economic well-being is a broader concept, but still restricted to material aspects. The Centre for the Study of Living Standards has developed an index of economic well-being. This index is comprised of four domains: consumption per capita, wealth per capita, economic equality and economic security. These four domains reflect economic well-being in the present and in the future, and is supposed to be a better measure of access to resources needed for a decent standard of living and the distribution of that access among members of society.[...]

Individual living conditions include non-material aspects such as health, life expectancy, education, the state of environment. The Weighted Index of Social Progress (data of 2009) sees Denmark and Sweden on the first place, Norway at the third place.

Happiness. According to the Euro barometer data the satisfaction of life may be influenced by factors other than income. Happiness depends primarily on family, friends, work satisfaction and free-time activities. There are three main reasons that explain the stagnation of happiness and the life satisfaction in long – run. First, according to it the persons tend to adaptation.