The Poor but Unusually Chipper and Long-Lived Index

The Happy Planet Index is an ideologically rigged ranking released each year by the New Economics Foundation as part of their fight against the evils of economic growth. As far as I can tell, the whole thing is based on the false assumption that it is physically impossible for the entire population of Earth to achieve OECD-levels of material wealth. I suspect NEF sort of hopes media outlets will misunderstand what their index is an index of, as they’ve chosen a rather misleading name for a ranking of countries according to this formula:

Nevertheless, here are some of the headlines:

Australia Not Home to the Good Life — Sydney Morning Herald
Costa Rica: World’s happiest place — Xinhua
Happy Costa Ricans top global list for the good life — Financial Times
Costa Rica tops list of ‘happiest’ nations — CNN

I do like the quotes around CNN’s ‘happiest’. So, anyway, what is the Happy Planet Index and index of?! Who can say!? Not journalists, who can be counted on to read no further than the press release. If one takes a moment to poke around the website for the Index, they do get around to saying: “The Index doesn’t reveal the ‘happiest’ country in the world,” which is a help. But they should put this up front, or change the name of the damn thing.

Anyway, so what’s this “ecological footprint”?

The ecological footprint of an individual is a measure of the amount of land required to provide for all their resource requirements plus the amount of vegetated land required to sequester (absorb) all their CO2 emissions and the CO2 emissions embodied in the products they consume. This figure is expressed in units of ‘global hectares’. The advantage of this approach is that it is possible to estimate the total amount of productive hectares available on the planet. Dividing this by the world’s total population, we can calculate a global per capita figure on the basis that everyone is entitled to the same amount of the planet’s natural resources. Using the latest footprint methodology, resulting in the data in the Global Footprint Network’s Ecological Footprint Atlas, the figure is 2.1 global hectares. This implies that a person using up to 2.1 global hectares is, in these terms at least, using their fair share of the world’s resources – one-planet living.

Don’t ask me why they think this makes sense. (Artifical trees!) In short it seems to mean that countries get docked for containing lots of people wealthy enough to buy lots of things.

Let’s move on to alpha and beta. What do they mean? NEF doesn’t tell you on the website. But if you diligently hunt around the pdf of the report, it is possible to discover Appendix 2, where it is finally revealed what the Happy Planet Index is an index of:

… a constant (α) is added to the ecological footprint to ensure that its coefficient of variance across the entire dataset matches the coefficient of variance for HLY across the dataset. In effect, this serves to dampen variation in the footprint. Once this is done, HLY can be divided by the adjusted footprint to produce an efficiency measure. This is then multiplied by a second constant (β) such that a country achieving a maximum life satisfaction score of 10, and life expectancy of 85, whilst living within its global fair share of resources (one-planet living), would score 100.

They apparently want to dampen the effect of the footprint to avoid the embarrassment of miserably impoverished countries “winning” simply due to the fact that they’ve got antibiotics but are too poor to buy coal.

It is well known in the happiness biz that Latin American countries tend to do better in terms of self-reported life satisfaction than their economic and political fundamentals would predict–in much the same way East Asian countries do worse. Given that the index strongly penalizes wealth, it’s not much of a surprise that the winner would be a poor-but-unusually-chipper Latin American country that also has a suprisingly good average lifespan.

Here is an article on Costa Rican longevity.

Here is my annoyed response to the 2006 index.

What do you make of this claim, just thrown out there in NEF’s explanation of its notion of ecological footprint: “[E]veryone is entitled to the same amount of the planet’s natural resources”?

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29 thoughts on “The Poor but Unusually Chipper and Long-Lived Index

  1. I don't have a problem with the basic notion of equal entitlement. It strikes me as a Varian-esque, no envy principle. In some sense you could call the measure an index of happiness efficiency. How much happiness can you get out X amount of the earth's resources. But, then it reinforces something we already know, the relationship between happiness and income is complex. However, given that self reported happiness almost certainly varies with cultural intepertations of the question and genetic predisposition its not an effecient measure. I say almost certainly because it could be that cultural institutions are driving a real difference in happiness. That is, living in East Asian culture might just be a less happy experience for the average person.

  2. Apologies for deviating somewhat from the topic, but this raises a related issues in my mind. Also this is one of the very best Big Idea blogs, so I'll hope for forgiveness.I imagine that the study's authors really do believe that, using current technologies, it really is impossible to transform the world into Denmark, probably because they think that Denmark's wealth is built on the use of coal and petrochemicals for fuel and electrical generation and that either there isn't enough coal, oil, or gas in the world, or the continued use of coal, oil, and gas will prove too environmentally destructive, for their use to be the basis of long-term global economic development. And so they stigmatize using coal, oil, and gas. And all this swirls around with the related question of whether we'll be able to invent our way out of the problem, and — maybe more importantly — whether we'll be able to do so on anything like a reasonable time frame.But to my mind, the answers to these empirical questions — you might collectively put is as, Will we be able to solve the energy problem? — are among the great questions of human civilization. They rank right up there with the question whether liberalism will be able to survive the invention, and proliferation, of nuclear weapons.I guess I want to ask Will what questions he'd put on a list of, say, five or ten Big Empirical Questions that he'd (you'd!) like to know the answers to. I think “Will we solve the energy problem?” and “Can liberalism coexist with nuclear weapons on a permanent basis?” are good candidates. Strong AI isn't at all interesting to me (I think it will happen, sooner than most people think, and it will be totally uninteresting), though I think I would put “Will we colonize a planet or moon other than Earth on a permanently sustainable basis, i.e., without need for supplies to be delivered from Earth?” on the list. Also, I'd like to know whether Aubrey de Grey is misguided or prophetic.

  3. “[E]veryone is entitled to the same amount of the planet’s natural resources”?I think this would be true if everyone were born at the exact same moment in time and then only at that very moment. After this completely fictional moment, all bets would be off. After all, is a person who leeches off of society really entitled to the same amount of the planet's natural resources as a person who transforms Earth's raw materials (and/or the subsequent man-made products) into something people find useful? Perhaps every person is entitled to some minimum standard of living (which could be expressed in terms of the planet's natural resources), but certainly not everyone is entitled to the same amount of resources regardless of their actions ad infinitum.

  4. Also, in re: the global-equal-share claim: isn't this one of the rare occasions in which Locke's “enough and as good” proviso is actually relevant to the topic of discussion? And then there's the work extending Rawls's TJ to a “global original position.”

  5. The idea of a global hectare is so absurd that I cannot even grasp it. Will, it's not only that these folks resist economic growth – they don't even understand it. The idea of something like a global hectare being a useful measure just illustrates this point.

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  7. Look at the top 20:1. Costa Rica2. Dominican Republic3. Jamaica4. Guatemala5. Vietnam6. Colombia7. Cuba8. El Salvador9. Brazil10. Honduras11. Nicaragua12. Egypt13. Saudi Arabia14. Philippines15. Argentina16. Indonesia17. Bhutan18. Panama19. Laos20. ChinaNext time you are enjoying fireworks with family and friends or surfing the premium movie channels in HD, just remember how good the people of the Honduras have it!

  8. “[E]veryone is entitled to the same amount of the planet’s natural resources”I don't necessarily disagree with Christopher Monnier's point above, but also, this needs to take into account human reproduction. If we all get the same number of global hectares, parents are “stealing” global hectares from the pool to give to their children, and that should really be counted as part of their consumption. I mean, we are all entitled to the same amount of space, except that some people will be able to lower the amount of space you're entitled to.It's especially distorting if children really do make you happy–or even if they only make you say you're happy–that is a big, environmentally-unfriendly consumption good you are giving away for free in this formula.

  9. I have a certain fondness for ridiculous, made-up statistical identities that have utterly meaningless units that get paraded around as if some new law of physics has been discovered. And of course you can't just pull a meaningless variable out of your ass without adjusting and normalizing it to get the conclusion you started with, thats what we call Science, baby.On the other hand, maybe we have finally discovered the true consequence of Colonialism, an oppressively high Alpha-Coefficient!Anyway, equal entitlement per person is easy to reject and most (all?) people do, including “believers”, as evident by the way they actually live. Some people add a high amount of value to society, some don't. Some societies add a high amount of value to global human welfare, and some don't. That was easy.

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  11. In the interest of brevity and snappiness, I suggest “The Contented Darkie Index”.

  12. Incidentally, the default setting for subscribing to comments appears to have changed to “subscribe”. Thaler and Sunstein are looking daggers at you.

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  14. While I agree Costa Rica is a really nice place filled with relatively happy people, you're definitely right that the index itself is pretty crazy. The CNN article especially unintentionally reveals that it's pretty much just an ecological index + a little bit of a happiness modifier added to it. Why are these two factors charted together? No idea. I think it's basically just a list of “how much the NEF likes each country” that they tried to come up with some actual reason to justify — but didn't try real hard.

  15. A good question. Why is envy the minimand? Why not some other socially undesirable trait, like poverty? (And might envy, taken as a minimand, actually decrease in a situation where entitlements are high but unequal?)

  16. Well the short answer is that someone might prefer to live in poverty rather than to do what is necessary to live in luxury. In many cases perhaps not but we cannot be sure.No envy basically just says, that you wouldn't rather trade your starting position with anyone else. All differences in income are matters of choice.

  17. “No envy basically just says, that you wouldn't rather trade your starting position with anyone else. All differences in income are matters of choice.”This is not what the real-world experience of envy is necessarily about. I suspect that even if resources were allocated with precise equality, and even if that equality could somehow be maintained over time, envy would still run rampant: We'd still want to own other people's stuff, and just add it to our own. A “no envy” rule of this sort (with which I was not previously familiar) would seem to require either a change in the definition of the word envy, or in human nature itself.

  18. I think that's too short an answer. Why would you think this goal should be the objective. I mean, just for starters, it's not Pareto efficient. I'm not saying you have to be a pure Paretian, but explaining why we ought to follow any particular rule that violates Pareto is a pretty high hurdle, even in the best of circumstances. And the no-envy principle isn't in that position: it's got time issues (can people born in different times envy you? what about people whose lives only partially overlap yours?) and people advocating that position clearly don't seem to really mean it (unless they mean it only applies within national borders, which is problematic too). So I think a huge effort at defense is needed here.

  19. This is a great point. There's a lot that's arbitrary about the index, but leaving out rates of reproduction is very arbitrary. It seems that a country should gain points for a sub-replacement rate of reproduction and lose points for a super-replacement rate. However, birthrates tend to drop with economic growth. And NEF wouldn't want to send mixed messages about growth.

  20. Rich people should be able to pay poor people for the right to use their CO2 allowances. Doing this makes both rich countries and poor countries happier but in their index it makes poor countries happier and rich countries sadder. Then if a poor country gets wealthy and stops selling its allowances to rich countires then it becomes less happy while other rich countries get more happy. This makes no sense. We should try to maximizing total happiness with no ecological adjustment. I happen to think that a global CO2 market would increase happiness or at least increase utility because the planet is a valuable asset and its worth something while current CO2 prices suggest its worth nothing..

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  22. It is important to look at ecological problems and GDP (and similar measures) can be quite crude, however the happy planet index doesn't do the job. Asking people how satisfied they are is too subjective for a start.I particularly unhappy at the high score for Colombia, where death squads continue to kick peasants from their land, so that biofuels can be grown to power vehicles in the EU and US.

  23. It's much worse than you make out Will. Much worse. For example, the over-riding factor in the ecological footprint thing is CO2 emmissions: I think we're all fairly clear that there is indeed something of a problem here? Of all the other resources there ain't.Still, I would say that this report is an improvement on the last one. Last time the top was Vanuatu: thus the solution to a happy ecologically pure life was wearning penis sheaths and worshipping the Duke of Edinburgh as a Living God (that latter possibly having merit).This time around they've noted that living in a tropical, Iberian influenced country does the business. That is, that it helps to have a siesta.Hey, I'll go with that as a the secret to the good life……

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  25. People flows: if people move from “high” index countries to “low” index countries, as clearly they do (or would if they could) that is a revealed preference which states that the index is not even close to measuring what people care about.

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