By Taylor Marvin
From The New York Times, here’s a great graphic (based on a paper by Betsey Stevenson and Justin Wolfers) that graphs a country’s residents’ reported level of happiness against the country’s average income.
First impression: money does buy happiness, though only to a point and the relationship isn’t very strong. It’s true that richer countries tend to be happier than poor nations, but there are very poor nations that are just as happy as the richest and rich countries gloomier than their income would suggest. Obviously there’s more going on here.
This graph suggests three broad groupings: low and middle income nations with a slight relation between higher income and greater happiness, poorer high income nations that still show the relationship, and finally rich high-income countries that show broadly similar levels of happiness despite widely dispersed income levels. This is a bit hard to see at first glance — remember that the x-axis isn’t on a constant scale. Here’s a clearer view:
This suggests that while money can buy happiness any additionally income after about $17,000 per year doesn’t make you any more satisfied with life- Americans make over $15,000 a year more than New Zealanders but both are generally very happy. However, there’s still large discrepancies between high-income nations’ happiness levels. What can explain these sometimes surprising differences? At first glance there isn’t any obvious similarities between the happiest rich nations; the Netherlands, Sweden, Denmark and Norway all have strong social safety nets that reduce the uncertainty of life but are about as happy as the US, which has one of the smallest welfare systems in the rich world. Additionally, some rich nations are more downcast than their similarly-high income peers. Again, finding the root cause of this unhappiness is difficult. Japanese are known for a working culture that values long hours and discourages personal creativity — factors that could contribute to Japan’s general low level of happiness. Other gloomy rich nations are more surprising: both Italy and France, renowned for their rich cultures and beautiful countryside, are less happy than their incomes would suggest. However, they do share a common social trait: both suffer from high (for European standards) public corruption. Corrupt societies, with its increased personal insecurity and a sense of pervasive unfairness, seems to have a strong relation with rich-world happiness. Very happy nations like Ireland, the Netherlands, Switzerland and New Zealand all have extremely low levels of corruption while the less happy poorer high-income group suffer from both lower incomes and higher corruption than their richer peers.
However, there doesn’t seem to be a strong connection between inequality and happiness.
China, Brazil and South Africa are all relatively happy places yet suffer from very unequal societies. Additionally, while India and Bulgaria are fairly egalitarian societies they are less happy than their income level suggests. It’s similar in the rich world. Some egalitarian nations like Canada and Scandinavia tend to be happy while others like Italy and France aren’t. Additionally, the US is a very happy nation despite its uniquely high level of inequality in the rich world.
As an aside, it seems like happy countries tend to have good weather. Tropical Indonesia, Columbia, Mexico, Nigeria and Vietnam all have low incomes but are generally very satisfied. Similarly, most post-Soviet nations are more depressed than their varied incomes would indicate, though this is likely more due to their chaotic political systems and generally corrupt economies than their dreary weather.
A factor that does seem to show a strong relationship with happiness level is economic freedom:
This makes intuitive sense — when people have some control over their income levels and have the ability to succeed with hard work they will feel more satisfied with life. Similarly, a political system where success depends solely on connections or the state is very depressing, so this result isn’t that surprising.
What is surprising is how happy the world generally is. Most citizens of the countries represented report themselves to be either satisfied or happy with their lives, despite their varied incomes and social differences. Additionally, the world average income of about $10,000 a year seem to hold special significance —once nations clear this income threshold they’re citizens report nearly universally high levels of wellbeing. This is encouraging. Measuring a country’s success by the happiness of its citizen makes more sense than artificial measures like GDP or consumption; if a society doesn’t make its people happy than what is it really worth? But even for the very poor very happy societies are possible, which of course makes the world a much more inspiring place.