Giving Compass' Take:

• As Governing explains, when it comes to the overall condition of an area, a happiness index provides information leaders need to form public policy and measure progress, while guiding inclusive growth, equity, and sustainability. 

• How can cities measure the mental well-being of their residents? What process can be used to collect this data?

• Learn more about inequality and inclusive growth.

American municipalities need to catch up to the many cities around the world that are quantifying and tracking their residents' happiness. Why? Because a happiness index may provide an important measure of a city's progress and policy direction. Policies are needed that support human capital, especially at the local level, because economies are tied to human capital. Degradation of social environments prevents individuals from attaining higher levels of education, increases crime rates and decreases civic engagement. Unhappy people make for an unhappy and unproductive community.

A well-being or happiness indicator — compiled though periodic surveys and perhaps augmented by analysis of data a city collects — goes beyond the traditional economic model of growth/success to include a multi-dimensional understanding of what issues affect happiness. Knowing how people are affected by environmental factors such as air quality, educational and workforce opportunities, and access to personal social networks is pivotal for overall economic well-being and for local policy decisions that are both compassionate and pragmatic.

A happiness indicator can help to guide municipalities toward policies that are focused on ensuring that growth is inclusive, creating opportunity for all segments of society, top and bottom. Inclusive growth can be thought of as a strategy to increase the extent to which the economy's top-line performance is translated into the bottom-line result society is seeking: broad-based expansion of economic opportunity and prosperity.

Read the full article about inclusive growth and the happiness factor by Coda Rayo-Garza at Governing Magazine.