The Happiness in Penang (HIP) Index 2020-2021

By Yeong Pey Jung, Negin Vaghefi

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MORE OFTEN THAN not, a nation’s state of progress and development is measured by the metrics of gross domestic product (GDP), gross national product (GNP), volume of foreign and domestic investments and other similar economic indicators.

These metrics, though effective tools to evaluate a country’s financial wealth by, do not measure the social development and wellbeing of its people. Various studies have shown that economic progress does not necessarily guarantee increased happiness and subjective wellbeing.1

In the U. K., steady economic growth between 2013 to 2015 had instead observed significant decreases in happiness levels, leading eventually to the Brexit vote.2 The example therefore demonstrates that equal weightage must be given to the elements of social progress, life satisfaction and happiness of a nation’s populace, for a holistic and inclusive sustainable development.

Happiness is Subjective

When asked what determines her happiness, Syalina* puts her family and financial freedom at the forefront. It is important that she enjoys a strong relationship with her family, alongside the ability to provide for them. But Meng* is of a different opinion. “Health is the most important factor for me. It is difficult to be happy when you’re not healthy!” He adds that being healthy allows him to partake in many forms of activity, therefore increasing his life satisfaction.

As it stands, happiness means different things to different individuals. Thus, in measuring overall happiness, a variety of aspects must be evaluated.

The Happiness in Penang Index (or HIP Index for short) – tasked to Penang Institute by the Penang State Government – is designed to measure the happiness and life satisfaction of Penangites. Taking a multi-dimensional approach, the HIP Index operationalises the four themes of the Penang2030 vision, namely Increase Penang’s liveability, Upgrade the economy, Strengthen civic engagement and Improve social resilience, into four domains and various indicators (Figure 1).

The reported conditions of 3,011 respondents, stratified mainly by gender, ethnicity and district, were surveyed for constructing the HIP Index. Findings were diverse and sometimes surprising. For instance, neutrality was found to be a prevailing sentiment in the domain of Freedom and governance.

More satisfied responses were also recorded than dissatisfied ones, especially for political freedom, and community and civic participation, with religious / cultural / spiritual freedom having the highest percentage of satisfied responses. On the other hand, significant differences in satisfaction levels were observed for governance. The Penang State Government received a more positive rating than the Federal Government.

For the domain of Economic wellbeing, satisfaction with social and economic mobility and household expenditures was high. In contrast, satisfaction with financial security was substantially lower, with a high percentage of respondents not having enough savings to sustain them beyond a year of immediate income loss.

In the domain of Environmental sustainability, strong satisfaction with government policies for environmental protection was observed. Of the state’s overall conservation efforts, water conservation rated highly in satisfaction levels, but forest and hill conservation was identified as a pressing issue. Concern was also considerable for air and river pollution, and for waste management. These three issues received the most attention.

Satisfaction with indicators for the Liveability and social wellbeing domain is relatively high, especially for family relationships, housing, and culture and heritage. However, less satisfaction was recorded for overall public cleanliness and urban connectivity, especially with traffic and road conditions.

In addition, most respondents describe themselves to be at least in a “good stage” of life at present. But there was also a significant percentage of respondents who found their quality of life to have been better before the pandemic.

The HIP Index – What does It Signify?

The HIP Index value for 2020-2021 has been calculated to be at 0.881. This indicates that about 76.5% of Penangites are happy, with the remaining 23.5% being not-yet-happy. Among the latter group, about 13.6% are narrowly happy and nearly 10% are unhappy (Figure 2).

Happiness is measured to be highest in the domain of Liveability and social wellbeing, where 79.3% are considered happy. In the domain of Freedom and governance, about 78.2% consider themselves happy. Where Economic wellbeing is concerned, the corresponding figure is 79.1%. The domain of Environmental sustainability sees the lowest percentage of happiness, and only 76.1% of total respondents think themselves happy (Figure 3). It should be noted that each domain and its respective indicators contribute differently towards the overall happiness of Penangites.

Happiness also differs by demographic characteristics. Results indicate that women are happier than men. Respondents in the age group of 60 and above, and youths also seem to be happier. A higher percentage of not-yet-happy was seen among those aged 31-59. A reason for this may be because the people in this age group (who belong to the working age population) have more life and work responsibilities, and therefore, have lower satisfaction levels in most indicators compared to the two other age groups. Additionally, those who were younger or retired had more free time to spend on wellbeing-promoting activities.

Although no significant difference was found in happiness by education level, respondents with lower- and upper secondary education reported a slightly higher percentage of unhappiness. The composition of happiness by employment status indicates that happiness is lower among those who are unemployed, but looking for employment. Conversely, happiness is highest among those unemployed and not looking for employment (mainly students and retirees).

The HIP Index attempts to incorporate the multidimensional nature of happiness to measure wellbeing, both over time and cross-sectionally by district and demographic characteristics of Penang’s population.

The Index functions as a tool to help policy-makers determine in which domains people lack sufficiency. This signals to the government which of its policy areas should be prioritised and how allocation of public resources can be most effectively done for Penang’s economic and social development to be sustainable, inclusive and well-balanced.

*Names have been changed upon request.

1 Easterlin, r. A. (1974). Does economic growth improve the human lot? Some empirical evidence. In nations and households in economic growth (pp. 89-125). Academic press.

2 clifton, j. (20th march, 2017). The happiest and unhappiest countries in the world, retrieved from gallup/206468/happiest-unhappiest-countries-world.aspx

Yeong Pey Jung

is a senior analyst with the Socioeconomics and Statistics Programme at Penang Institute. She is a reading enthusiast and is surgically attached to her Kindle.

Negin Vaghefi

is a senior analyst at Penang Institute. She holds a Ph.D. in Environmental Economics. Her research interests include agri-environmental economics, climate change, green economics, poverty and income inequality, and policy analysis.