Traditionally, the wellbeing of any country's economy is measured by a number of carefully-measured and calculated indices and sets of data.

This includes things such as consumer inflation, the price of goods leaving the factory gate (producer inflation), unemployment data, the number of new house plans approved and the state of the construction industry.

All of these signs are supposedly very concrete and reliable methods to measures the growth or contraction of the overall economy. It's a way of keeping a finger on the pulse of the country, so to speak.

What about the people?

But what about the citizens of a country? They are, after all, its lifeblood. If you have a country full of precious mineral resources, fertile farmland and wonderful locations for industry and cities ? but no people ? then you have nothing more valuable than a big pile of rocks and dirt.

Economists and other experts have started to voice the opinion that while current economic measurements and theories are sound, they don't take into account one very important thing: the social health of a country's people.

If a country's economy is rocketing but the people are incredibly unhappy, then how much is that growth worth? Unhappy people eventually become unproductive, unhealthy and unruly ? not a good recipe for keeping an economy on its feet.

Happiness gauge

So how do you measure happiness? It appears to be very subjective; what brings joy to one person may not even stir an emotion in another.

Economists have put much thought into this because they understand all too well that social health plays an important role in determining the well-being of any country. Using large samples of data they have been able to demonstrate that there are consistent and measurable patterns to happiness.

Economics expert Carol Graham, whose research focuses on poverty, inequality, public health, and novel measures of well-being, says that while psychologists have for some time used surveys of reported well-being to study happiness, economists have only recently ventured into this area.

In an abstract from The New Palgrave Dictionary of Economics, titled The Economics of Happiness, she says the idea behind such studies is not to replace current measures of economic welfare but instead to complement them with broader measures. They can help to explain economic behaviour that standard theories cannot. Why a person may choose a lower-paying but more personally rewarding job, for example.

You can't buy it

What is probably most revealing about studies in economic happiness is that they show that while wealthier people are, on average, happier than poor ones, there is very little relationship between increases in pay and happiness levels.

In short: even human science shows that money does not buy you happiness.

More importantly, Graham says, "happiness research can deepen our understanding of poverty ? theory suggests that a destitute peasant can be very happy".

This fact could be particularly import for governments, especially in developing countries, to understand. Knowing what makes people happy, and how these people measure their happiness, can have a significant impact on macro- and micro-economic policy decisions.

Potential

How happiness affects work effort, consumption, and investment - and what that means for political behaviour ? is the promise that further research in this area holds.

"Surveys of unhappiness or frustration may be useful for gauging the potential for social unrest in various contexts," Graham says.

The findings also send a clear message to governments around the world that these economics could be key to their future survival. Perhaps it's time for them to stop worrying only about how wealthy their people are, and to determine how best to keep them happy.