France to keep GDP economic measurement, says figuring out happiness too complicated for now

By Emma Vandore, AP
Tuesday, November 17, 2009

France: GDP stays, happiness too hard to pin down

PARIS — Gross domestic product — that traditional way of measuring economic growth — has won out over a new happiness index in France.

The head of France’s statistics office dashed hopes Tuesday that a report commissioned by President Nicolas Sarkozy could lead to a new, less-profit focused measure of economic growth.

Insee chief Jean-Philippe Cotis said he has no plans to stop monitoring GDP, and although his agency plans new quality of life studies, it was too early to say how his statistical toolbox should be adapted to take that into account.

“We will keep GDP as an indicator measuring economic activity,” he told a Paris press conference. “In the middle of macroeconomic crisis, we need an indicator that captures in a rather sophisticated way the fluctuations of market activities.”

In 2007, Sarkozy commissioned Nobel prize-winning U.S. economist Joseph Stiglitz to give new thought to the way GDP is calculated so that happiness and other quality of life measurements can be included in measurements of French economic growth.

But Cotis said if statisticians were forced to include measures of happiness into GDP calculations, the publication of statistics would happen “much later.” Measuring happiness is also complex and expensive, he said.

“It’s too complicated a subject to sum up in a single figure,” Cotis said.

Once the preserve of philosophers, measuring happiness has become a hot topic in economics.

A key member of Stiglitz’s team was Armatya Sen of India, who won the 1998 Nobel prize in economics for his work on developing countries. Sen helped create the United Nations’ Human Development Index, a yearly welfare indicator that takes account of health and living standards.

And Sarkozy is not the only leader to aspire to new ways of monitoring progress. The tiny Himalayan kingdom of Bhutan long ago dispensed with the notion of GDP as a gauge of well-being. The king decreed that his people would aspire to Gross National Happiness instead.

The Stiglitz report, presented to Sarkozy in September, offers a raft of factors that governments should take into account when making policy, such as environmental sustainability, household income, consumption and wealth rather than national production.

At the time, Sarkozy called for an end to the global obsession with GDP and asked the French statistics office to implement the report’s recommendations.

Insee is producing new statistics following recommendations that say more prominence should be given to the distribution of income and wealth, as well as to access to education and health, but it doesn’t plan a rival series to GDP.

Cotis said he is working with statisticians at the European agency Eurostat and the Organization for Economic Cooperation and Development, the Paris-based club of rich countries, to share the heavy costs of measuring additional elements.

Sarkozy’s move raised questions about whether he wanted to detract attention from France’s often lackluster GDP performance and gain recognition for the country’s leisurely meals, long vacations and widespread labor protections.

When he presented his report, Stiglitz said France’s ranking would rise in comparison to the U.S. if his recommendations were followed. In terms of GDP, French growth has lagged behind the U.S. throughout most of the past 30 years, although the recent turmoil in financial markets has hit the U.S. economy harder.

will not be displayed