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The assessment of gross national happiness (GNH; Wylie: rgyal-yongs dga'a-skyid dpal-'dzoms) was designed in an attempt to define an indicator that measures quality of life or social progress in more holistic and psychological terms than only the economic indicator of gross domestic product (GDP).
The term "gross national happiness" was coined in 1972 by Bhutan's fourth Dragon King, Jigme Singye Wangchuck, who has opened Bhutan to the age of modernization soon after the demise of his father, Jigme Dorji Wangchuk. He used this phrase to signal his commitment to building an economy that would serve Bhutan's unique culture based on Buddhist spiritual values. At first offered as a casual, offhand remark, the concept was taken seriously, as the Centre for Bhutan Studies, under the leadership of Karma Ura, developed a sophisticated survey instrument to measure the population's general level of well-being. Two Canadians, Michael and Martha Pennock played a major role in developing the Bhutanese survey, which took a six to seven hour interview to complete. They developed a shorter international version of the survey which has been used in their home region of Victoria BC as well as in Brazil. The Pennocks also collaborated with Ura in the production of a policy lens which is used by the Bhutanese GNH Commission for anticipating the impact of policy initiatives upon the levels of GNH in Bhutan  .
Like many psychological and social indicators, GNH is somewhat easier to state than to define with mathematical precision. Nonetheless, it serves as a unifying vision for Bhutan's five-year planning process and all the derived planning documents that guide the economic and development plans of the country. Proposed policies in Bhutan must pass a GNH review based on a GNH impact statement that is similar in nature to the Environmental Impact Statement required for development in the U.S.
The Bhutanese grounding in Buddhist ideals suggests that beneficial development of human society takes place when material and spiritual development occur side by side to complement and reinforce each other. The four pillars of GNH are the promotion of sustainable development, preservation and promotion of cultural values, conservation of the natural environment, and establishment of good governance. At this level of generality, the concept of GNH is transcultural—a nation need not be Buddhist to value sustainable development, cultural integrity, ecosystem conservation, and good governance. Through collaboration with an international group of scholars and empirical researchers the Centre for Bhutan Studies further defined these four pillars with greater specificity into eight general contributors to happiness—physical, mental and spiritual health; time-balance; social and community vitality; cultural vitality; education; living standards; good governance; and ecological vitality. Although the GNH framework reflects its Buddhist origins, it is solidly based upon the empirical research literature of happiness, positive psychology and well-being.
There is no exact quantitative definition of GNH, but elements that contribute to GNH are subject to quantitative measurement. Low rates of infant mortality, for instance, correlate positively with subjective expressions of well-being or happiness within a country. The practice of social science has long been directed toward transforming subjective expression of large numbers of people into meaningful quantitative data; there is no major difference between asking people "how confident are you in the economy?" and "how satisfied are you with your job?"
GNH, like the Genuine Progress Indicator, refers to the concept of a quantitative measurement of well-being and happiness. The two measures are both motivated by the notion that subjective measures like well-being are more relevant and important than more objective measures like consumption. It is not measured directly, but only the factors which are believed to lead to it.
According to Daniel Kahneman, a Princeton University psychologist, happiness can be measured using the day reconstruction method, which consists in recollecting memories of the previous working day by writing a short diary.
A second-generation GNH concept, treating happiness as a socioeconomic development metric, was proposed in 2006 by Med Jones, the President of International Institute of Management. The metric measures socioeconomic development by tracking seven development areas including the nation's mental and emotional health. GNH value is proposed to be an index function of the total average per capita of the following measures:
The above seven metrics were incorporated into the first Global GNH Survey.
Ed Diener, a psychologist from the University of Illinois at Urbana-Champaign, has developed a scale referred to as subjective well-being, a concept related to happiness and quality of life, which has been used to compare nations to each other on this construct. This study found that "high income, individualism, human rights, and social equality correlated strongly with each other, and with SWB" (p. 851, abstract).
Adam Kramer, a psychologist from the University of Oregon, has developed a behavioral model of "Gross National Happiness" based on the use of positive and negative words in social network status updates, resulting in a quantitative GNH metric.
In 2009, the 5th International Conference was held at Foz do Iguaçu, Brazil, with more than 800 participants. The conference was organised by Future Vision Ecological Institute and Itaipu Bi-national Hydroelectric Facility, in collaboration with the Centre for Bhutan Studies. The growing interest in GNH within Brazil has resulted from the work of Dr. Susan Andrews at the Instituto Visão Futuro which sponsored a series of events in São Paulo and Campinas in October 2008. Speakers included Karma Ura from Bhutan and Michael Pennock from Canada.
The 4th International Conference on Gross National Happiness was held in Bhutan with a focus on Practice and Measurement. Results of the Bhutanese survey were presented and a number of international contributors discussed different approaches and challenges to the measurement and application of the GNH framework.
The 3rd International Conference on Gross National Happiness Towards Global Transformation: World Views Make a Difference offered an opportunity to articulate Asian world views towards transformation in a "message to the world." It took place in Nong Khai and Bangkok, Thailand between 22 and 28 November 2007.
Implying the transition from a natural to modernized state, the 3rd International Conference on Gross National Happiness (GNH 3) took place in two locations: the first three days took place in rural north-eastern province of Nong Khai and the last three days in the urban campus of Chulalongkorn University in central Bangkok, Thailand. The organizers planned all activities so that participants were able to explore a large variety of venues, presentation and discussion formats and draw on the great variety and talents of the entire group of 800 participants who registered.
Main co-organizers were the Sathirakoses Nagapradipa Foundation (Thailand), Centre for Bhutan Studies, while local NGOs, progressive business group Social Venture Network and the government of Thailand in particular The Ministry of Social Development and Human Security, Thailand, have formed a support network together with research agencies and other government departments like the Thai Health Promotion Foundation.
"Rethinking Development: Local Pathways to Global Wellbeing," the Second International Conference on Gross National Happiness was held in Antigonish, Nova Scotia June 20–24, 2005, co-hosted by Genuine Progress Index Atlantic (proceedings online); the Coady International Institute; Shambhala; the Centre for Bhutan Studies; the Province of Nova Scotia; the Gorsebrook Research Institute at Saint Mary's University; and the University of New Brunswick.
In a widely cited study, "A Global Projection of Subjective Well-being: A Challenge to Positive Psychology?" by Adrian G. White of the University of Leicester in 2007, Bhutan ranked eighth out of 178 countries in Subjective Well-Being, a metric that has been used by many psychologists since 1997. In fact, it is the only country in the top 20 "happiest" countries that has a very low GDP.
National happiness is also sometimes classified under empirically studied "National Happyism," and psychologists, Drs. Ed Diener and Robert Biswas-Diener, have researched and analyzed what could be described as technological elements and characteristics of happiness for both individuals and societies.
Critics state that because GNH depends on a series of subjective judgments about well-being, governments may be able to define GNH in a way that suits their interests. Critics say that international comparison of well-being will be difficult on this model; proponents maintain that each country can define its own measure of GNH as it chooses, and that comparisons over time between nations will have validity. GDP provides a convenient, international scale. Research demonstrates that markers of social and individual well-being are remarkably transcultural: people generally report greater subjective life satisfaction if they have strong and frequent social ties, live in healthy ecosystems, experience good governance, etc. Nevertheless, it remains true that reliance on national measures of GNH would render international comparisons of relative well-being more problematic, since there is not and is not likely ever to be a common scale as "portable" as GDP has been.[vague] Nevertheless, Bhutan's stated goal is to maximize whatever they see as GNH, not compare numbers with other countries.
Alternative indicators of emotion as an analog to economic progress have also been supported by a number of NGOs such as the UK's New Economics Foundation, and are employed in some governments notably in Europe and Canada. The Gallup poll system also collects data on wellbeing on a national and international scale.