Viktor Frankl, in his seminal work “Man’s Search for Meaning,” conjectures that happiness and misery, far from being straightforward states of existence, are intimately woven into one’s quest for purpose and meaning in life. While the World Happiness Index and the Misery Index propose to quantify these complex, subjective states, the task is riddled with methodological challenges, as illustrated by these tools’ sometimes conflicting results.
These indices take divergent approaches, scrutinizing various facets of well-being and economic conditions that are thought to determine levels of happiness and misery. Yet, their measurements can produce puzzling outcomes. Take Finland, for example, celebrated as the world’s happiest nation in the World Happiness Index, it curiously stands at the 109th spot on the Misery Index out of 157 countries. This contradiction emphasises the inherent difficulty in encapsulating happiness within mere economic indicators, suggesting that other factors play a considerable role in shaping subjective well-being.
Similarly, the case of Zimbabwe, gripped by runaway inflation and economic disarray, stands as the most miserable country as per Hanke’s Annual Misery Index 2022. This extreme case indeed attests to the detrimental effects of economic instability on well-being. However, it also underscores the limitations of such indices in fully capturing the nuances of human happiness and misery. As Frankl’s perspective implies, external circumstances alone cannot fully encapsulate the subjective experience of these states, reinforcing the complexity and challenges inherent in quantifying such deeply personal and inherently subjective experiences.
People frequently misconstrue the inquiries posed by investigators, while these same investigators often misunderstand the responses they receive. Traditional research questions fail to reliably elicit the crucial data that scientists anticipate obtaining. The queries designed to encompass the range of our actual concerns fall significantly short of their intended purpose.
The World Happiness Index covers 137 nations and uses a wide range of indicators to evaluate a nation’s level of happiness. It considers economic factors like GDP per capita, social aspects such as social support, life expectancy, freedom, generosity, and perception of corruption. By taking these factors into account, the index seeks to evaluate the overall subjective well-being and happiness of a population. The index is determined by averaging the survey results, which are used to gauge how happy respondents are on a scale from 0 to 10.
The World Happiness Index depends on data sourced from the Gallup World Poll. For a nation as large and diverse as India, the sample represents only 2,000 to 3,000 individuals.
Disregarding the potential pitfalls related to sample size, there exists a fundamental issue with the use of single-question wellbeing indicators, as employed in the Happiness Index. A research paper in the Behavioural Public Policy Journal (https://tinyurl.com/5e8dwkdc) revealed that respondents tend to prioritize options linked with higher income over those perceived to augment their life satisfaction or happiness. This indicates that the survey might undervalue the potential benefits of increased income in comparison to other happiness and wellbeing aspects.
Contrastingly, the Misery Index places more weight on economic prosperity by considering variables such as inflation, unemployment, interest rates, and real GDP growth rates. It amalgamates the inflation and unemployment rates, presuming that heightened unemployment and inflation impose socioeconomic burdens on a country. Hanke’s Annual Misery Index, a variant of Arthur Okun’s original index, accentuates unemployment by doubling its weightage in the computation.
However, Hanke’s Misery Index has attracted criticism for perceived deficiencies in its methodological approach. The unemployment rate it employs only acknowledges individuals actively pursuing employment, disregarding those who have ceased their job search, thereby potentially underrepresenting the actual scale of unemployment and its effect on societal well-being. The index further fails to account for the potential advantageous impacts of low inflation on interest rates, which could catalyse borrowing and investment activities, thus significantly influencing the broader economic environment.
Despite India’s significant economic strides, the nation sadly holds the 103rd rank in the Misery Index, primarily due to high unemployment rates. This index is derived from official inflation rates based on consumer prices and the unemployment data obtained from the Consumer Pyramids Household Survey conducted by CMIE.
However, scrutinising this data’s veracity and inclusivity is crucial. CMIE’s methodology, relying on a sample of households, raises questions about its representativeness, given the diversity of the Indian population. Many have written that how CMIE’s sample is biased towards the urban population. Furthermore, the data is often subjected to volatility and seasonality, especially in sectors marked by erratic employment trends, casting doubts on the reliability of the index.
Most critically, the Misery Index falls short in incorporating the substantial informal economy that forms a significant part of India’s economic fabric. These workers, due to the informal nature of their employment, are often overlooked in official unemployment calculations, thereby causing the Misery Index to present an incomplete and potentially misleading picture of the country’s economic wellbeing. This is a glaring shortcoming, given the vital contribution of these workers to the Indian economy. Hence, a more holistic and representative measure is called for, one that encapsulates the complexities and nuances of India’s vibrant economic landscape.
Hanke’s Misery Index provides a fixed portrayal of an economy’s state at a given point, neglecting temporal fluctuations. Consequently, it may be unsuitable for identifying trends, detecting patterns, or appraising the impacts of policy changes.
Additionally, the weight assignment to each element in Hanke’s Misery Index is subjective, grounded on numerous presumptions. For instance, the duplication of the unemployment rate may not precisely represent its consequences on overall well-being.
Furthermore, the data employed in Hanke’s Misery Index’s computation may vary in terms of precision and trustworthiness across different countries. The comparability of index scores between nations can be disrupted by disparities in data collection methodologies, reporting standards, and statistical rigour.
The index also lays primary stress on economic parameters, while bypassing non-economic constituents that influence comprehensive well-being and life quality. Factors like social support, health, education, income disparity, and environmental sustainability, which can significantly influence overall happiness or misery, are ignored.
The efforts to distill subjective human experiences into quantifiable metrics must always be viewed through a lens of scepticism. Indices like the World Happiness Index and the Misery Index, are susceptible to methodological shortcomings, bias, and oversimplification. Particularly, for a country as diverse and complex as India, such indices often fail to paint an accurate and comprehensive picture of the nation’s state of affairs.
With their subjective premises, these indices inadvertently perpetuate a negative narrative about India, not fully acknowledging the nation’s complexities and the strides it has made on various fronts. Furthermore, they may not entirely take into account the cultural nuances, socio-economic intricacies, and the significant informal sector that form a substantial part of India’s unique narrative. Therefore, it becomes essential to scrutinize the data these indices utilize and the narrative they create.
Aditya Sinha is Additional Private Secretary (Policy & Research), Economic Advisory Council to the Prime Minister & Akanksha Saini is Young Professional, EAC-PM.