The opinion that human well-being is primarily related to economic wealth is widely accepted in society. This, of course, has its arguments. Perhaps people’s well-being is largely attributed to their financial capabilities. Therefore, various economic indicators, such as gross domestic product (GDP), are often used to compare the countries by their level of development.
Literature analysis shows that money/economic income is characterized by diminishing happiness returns (the feeling of happiness, in turn, is a component of well-being). Happiness is linked to economic income over some period of time, but over the long term, this link between happiness and higher economic income is no longer evident.
Clearly, economic indicators alone do not determine individual and social well-being and may not even be the decisive factor. Moreover, observations at different stages of human evolutionary development show that economic progress has not always been associated with higher levels of happiness[i]. Let us recall a kind of classification of human needs (the so-called „Maslow Pyramid“), which was presented in 1943 by the American psychologist Abraham Maslow in his work „Theory of Human Motivation“[ii]. The author calls the highest, 5th level of needs („the need for self-actualization“) the state of „ultimately happy“ where “what a man can be, he must be“. Although this model of human needs is known as a „pyramid“, it should be noted that Abraham Maslow himself did not give these needs a pyramid shape[iii]. In fact, there is no strictly hierarchical relationship between needs. Obviously, without satisfying basic needs, people will have difficulty thinking about other, higher-level needs. However, it is not necessary that the needs corresponding to each stage be fully satisfied in order for a person to move on to the next stage. It is more realistic for the model of human needs to have a wavy shape[iv] (rather than a pyramid), which is an expression of the fact that the needs corresponding to different stages can be satisfied in parallel. Financial security issues (including income, employment, property, etc.) belong to the 2nd level of the „Maslow Pyramid“. However, this should not be used as a basis for saying that if it is still important for a society to satisfy the needs of financial security, this society should not think about satisfying higher level, well-being and happiness needs. For example, it is often said that „protecting the environment is a luxury of rich countries“. However, the reality is that caring for the environment and sustainable development are equally important for all countries (regardless of their GDP level), since the future of the planet in general and, including, economic development depends on the current behavior of people towards the environment and natural capital.
Well-being and happiness, as a universal goal of the development of the individual and society, have attracted the attention of many thinkers and scientists. The notion of „pursuit of happiness“ appeared at the state level in the context of human rights. Let us recall the Declaration of Independence (adopted on July 4, 1776) of the United States of America and its second paragraph which is attributed to Thomas Jefferson, one of the founding fathers and the third President of the USA: „All men are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness“[v].
Assessments of happiness and well-being have received increasing attention in the 21st century and it was reflected both at the national level via the integration of well-being goals into the policies of various countries and on a global scale, in the form of the development of a number of international indicators and indices. Interesting examples of integrating well-being issues into public policy at the national level can be found in the United Kingdom, Australia, New Zealand, Canada. At present, three well-being/happiness related assessments and indices stand out on the international level and we will discuss them in this article (For more detailed information about national and international models of well-being, see the brief research review in the document attached at the end of the article):
- Human Development Index (HDI)
HDI measures human development in three main dimensions[vi]: (1) Long and healthy life (life expectancy at birth); (2) Knowledge (expected years of schooling and mean years of schooling); (3) A decent standard of living (Gross National Income (GNI) per capita). Interestingly, the index is adjusted with various additional components, including environmental components. In particular, two additional indicators are included in the index: „Carbon dioxide emissions per capita“ and “Material footprint[vii] per capita“, resulting in a Planetary pressures-adjusted HDI (PHDI).
Based on the latest (2022) assessment, Georgia ranks 60th out of 193 countries in the world according to HDI and is in the “very high human development” group with a score of 0.814. However, Georgia’s score drops to 0.767 for PHDI (5.8% lower than HDI score).
The difference between HDI and PHDI scores becomes even more apparent when looking at the results over the long term. When the difference between HDI and PHDI is higher and increasing, it means that there are greater planetary pressures in parallel with the development and from countries in the higher development group.
- Happy Planet Index (HPI)
HPI is measured by the following three indicators: (1) Life Expectancy; (2) Self Reported Wellbeing; (3) Carbon Footprint[viii]. HPI is a measure of how effectively countries transform the Earth’s limited resources into the well-being of their citizens.
The 2024 HPI report presents results for 147 countries around the world as of 2021[ix]. The Happy Planet Index is designed so that the maximum score (100) will be given to the country if the maximum well-being is achieved within environmental limits. Not to mention other countries, even the best-performing country (Vanuatu with a score of 57.9) is still far from the maximum score and only 16 countries score above 50. Georgia ranks 80th on the Happy Planet Index with a score of 37.2 and this position has not changed significantly over the years.
As it is discussed in 2024 Report, the HPI level increases somewhat with GDP up to a certain point, but then decreases again. However, the weakness of this relationship is also noteworthy: GDP explains only 21% of the HPI variation (R2=0.2138). The relationship between GDP growth rate and HPI is even weaker. GDP growth rate explains less than 6% of the variation in HPI (R2=0.0582). As the results show, faster economic growth is not associated with higher HPI in countries.
- World Happiness Reports
The 2025 World Happiness Report presents the results for 147 countries[x]. Finland and Denmark are at the top of the list, while Afghanistan occupies the last place on the list. According to the “Happiness Index”, Georgia’s position has remained almost unchanged for the past three years (the country ranked 90th-91st in the world during 2022-2024), however, the ranking has improved compared to 2019-2021 and the previous period, when Georgia was outside the top hundred countries in the world. Life Evaluations on a 0-10-point scale have increased in Georgia in 2024 compared to 2011 (3.892 points in 2011 and 5.400 points in 2024). However, the fact that Georgia’s score is only slightly above (5.4) of the half of the maximum (10) and the country is also outside the top half in the world ranking, indicates that the country still faces significant challenges in terms of people’s quality of life.
The authors of the study explain the "Happiness Index" of countries according to six components: (1) GDP per capita; (2) Healthy life expectancy; (3) Social support; (4) Freedom to make life choices; (5) Generosity; (6) Perceptions of corruption. Based on data from 2005 to 2024, the study authors conclude that, taken together, these six variables explain more than three-quarters (75%) of the variance in Life Evaluations. This trend is also evident in the results for Georgia. Besides, in case of Georgia, the factor of GDP per capita plays the largest explanatory role (on average, within 25-28%), the role of the Social Support is high and growing (on average, within 16-24%), while the role of the Generosity is the lowest and sometimes zero.
All three international assessments discussed above provide us with particularly valuable information about the development, well-being and happiness of societies from different perspectives. However, it is important that, in parallel with the development of international assessments and indices, the introduction of detailed and comprehensive national well-being assessment models becomes more relevant (For more detailed information about national and international models of well-being, see the brief research review in the document attached at the end of the article). Clearly, the development of a multi-factor model of happiness and well-being assessments and its introduction in Georgia at the national level will give us a more accurate picture of what determines and how the well-being of the society is actually changing, than it is shown solely by economic activity indicators.
Check the full research article here.
[i] Harari, Y. N. (2014). „Were we happier in the stone age?“. The Guardian.
https://www.theguardian.com/books/2014/sep/05/were-we-happier-in-the-stone-age
[ii] Maslow, A. H. (1943). „A Theory of Human Motivation“. York University, Toronto, Ontario. ISSN 1492-3713. Originally Published in Psychological Review, 50, 370-396.
https://psychclassics.yorku.ca/Maslow/motivation.htm
[iii] Kaufman, S.B. (2020). „Transcend: The New Science of Self-Actualization“.
https://www.bps.org.uk/psychologist/transcending-maslows-pyramid
[iv] Cloke, H. (2023). „Maslow’s Hierarchy of Needs: A Guide for Learning Professionals“.
https://www.growthengineering.co.uk/maslows-hierarchy/
[v] „We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, --That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness“.
Declaration of Independence: A Transcription. In Congress, July 4, 1776.
https://www.archives.gov/founding-docs/declaration-transcript
[vi] Human Development Index (HDI).
https://hdr.undp.org/data-center/human-development-index#/indicies/HDI
[vii] „Material footprint” refers to the total amount of raw materials extracted to meet final consumption demands. It is one indication of the pressures placed on the environment to support economic growth and to satisfy the material needs of people.
https://unstats.un.org/sdgs/report/2019/goal-12/
[viii] „Carbon Footprint“ is an estimate of the per capita greenhouse gas emissions associated with consumption and economic activity within a country.
https://happyplanetindex.org/HPI_2024_report.pdf
[ix] The Happy Planet Index - 2021 Results.
https://happyplanetindex.org/hpi/
[x] Helliwell, J., Layard, R., Sachs, J., De Neve, J.-E., Aknin, L., & Wang, S. (2025). „World Happiness Report 2025“. University of Oxford: Wellbeing Research Centre.
https://worldhappiness.report/ed/2025/
