I was pleased to catch Geoff Mulgan giving a keynote at the northern regeneration summit last week. Very interesting (I only know of him through his apparent interest in Stafford Beer). His talk drew the focus to indexes of happiness in communities, rather than quantitative material measures. He produced some graphs which seemed slightly dubious.
I'm not sure about Happiness - particularly as Layard sees it (and I think he is the principle influence on Mulgan's work). It is, like so many words that describe how we feel, an explanatory principle. It explains why I smile, why I have lots of energy, why I laugh a lot, why I sleep well, why I work hard, why I rarely complain, why I often praise. But it doesn't really. Just as opium causes us to sleep because of it's 'dormitive principle' (as in Moliere), does happiness causes us to smile because of its 'smilative principle'? Does it cause us to have lots of energy because of its 'energising principle'?
For better explanations, we must look at what happiness does, not what it is. We must then consider the mechanisms that produce those outcomes (which are probably dependent on the cultural context too). My guess is that Luhmann, Bateson, Beer, Maturana, etc may be able to shed some light on this.