Reconsidering the Well-Being: the happy planet index and the issue of missing data

The main aim of this paper is to build up and to analyze a composite indicator, the Happy Planet Index (HPI), as an alternative measure to the Gross Domestic Product (GDP) in evaluating nations’ well-being. HPI was firstly developed by the New Economic Foundation in July 2006 and it is the first well-being composite indicator that considers in its calculation a subjective measure of well-being: life satisfaction. This work updates the HPI for 178 countries using the most recent available datasets. Due to the lack of country data for some of the variables used to build up the HPI, it has been necessary to run some missing data estimation procedures. The results obtained show that no country manage to score high in terms of HPI because of countries’ incapacity to maintain high living standards (expressed in terms of happy life years) and at the same time assure sustainability. Comparing HPI with GDP, no association between the resulting countries’ classification was found, living proof that this indicator does not reflect the same reality that GDP illustrates.