HAPPINESS, LONG holidays and a sense of wellbeing may not be everyone’s yardstick for economic performance, but Nicolas Sarkozy believes they should be embraced by the world in a national accounting overhaul.

France’s president has urged other countries to adopt proposed new measures of economic output unveiled by an international panel of economists led by Joseph Stiglitz, the US Nobel Prize winner.

Mr Sarkozy, who set up the Stiglitz-led commission last year, said the world had become trapped in a “cult of figures”. Insee, the French statistics agency, would set about incorporating the new indicators in its accounting, Mr Sarkozy said.

One consequence of the commission’s proposed enhancements to gross domestic product data would be to improve instantly France’s economic performance by taking into account its high-quality health service, expensive welfare system and long holidays.

At the same time, the commission’s changes would downgrade US economic output.

The commission proposed accounting for people’s wellbeing and the sustainability of a country’s economy and natural resources when measuring GDP.

Mr Stiglitz and co-author Jean-Paul Fitoussi said a more comprehensive method for measuring performance would cut the per capita GDP gap between the US and France by at least half.

US per capita GDP is 14 per cent higher than France’s. Although the commission did not work out the effects of its proposals on different countries, Mr Stiglitz said the changes would bring “a number of major adjustments”.

The US spends 15 per cent of its GDP on health and France 11 per cent. If GDP accounted for outcomes, not just financial inputs, that alone would cut the per capita GDP by a third. – (Copyright The Financial Times Limited 2009)