The relationship between wealth and happiness, by country
Throughout history, the pursuit of happiness has been a concern of mankind.
Of course, we humans not only measure our own happiness, but also our happiness in relation to the people around us – and even other people in the world. The annual World Happiness Report, which uses data from global surveys to report on how people rate their own lives in more than 150 countries, helps us do just that.
The factors that contribute to happiness are as subjective and specific as the billions of humans they influence, but there are a few that have continued to resonate over time. Family. To like. Objective. Wealth. The first three examples are difficult to measure, but the last ones can be analyzed based on the data.
Does Money Really Bring Happiness? Let’s find out.
Wealth and Happiness
To analyze the numbers, we looked at data from Credit Suisse, which breaks down the average wealth per adult in various countries around the world.
The table below examines 146 countries according to their happiness score and wealth per adult:
|Country||Median wealth per adult (US$)||Happiness score|
|🇳🇱 Netherlands||136 105||7.4|
|🇳🇿 New Zealand||171,624||7.2|
|🇺🇸 United States||79,274||7.0|
|🇨🇿 Czech Republic||23,794||6.9|
|🇬🇧 United Kingdom||131,522||6.9|
|🇨🇷 Costa Rica||14,662||6.6|
|🇦🇪 United Arab Emirates||21,613||6.6|
|🇸🇦 Saudi Arabia||15,495||6.5|
|🇭🇺 Hungary||24 126||6.1|
|🇰🇷 South Korea||89,671||5.9|
|🇧🇦 Bosnia and Herzegovina||15,283||5.8|
|🇩🇴 Dominican Republic||22,701||5.7|
|🇭🇰 Hong Kong SAR||173,768||5.4|
|🇿🇦 South Africa||4,523||5.2|
|🇨🇮 Ivory Coast||6,621||5.2|
|🇲🇰 North Macedonia||51,788||5.2|
|🇧🇫 Burkina Faso||622||4.7|
|🇨🇩 DR Congo||356||4.4|
|🇸🇱 Sierra Leone||370||3.6|
|🇸🇸 South Sudan||2,677||2.9|
Although the results do not definitively indicate that wealth contributes to happiness, there is a strong correlation across the board. Generally speaking, the poorest countries in the world have the lowest happiness scores and the richest are the happiest.
Regional and national observations
While many countries follow an obvious trend (more wealth = more happiness), there are nuances and outliers worth exploring.
- In Latin Americapeople report more happiness than the trend between wealth and happiness would predict.
- On the other hand, many countries in the Middle East report slightly less happiness than wealth levels predict.
- Political unrest, economic crisis and the devastating explosion in Beirut have resulted in Lebanon score much worse than one would expect. Over the past decade, the country’s score has fallen by nearly two full points.
- hong kong has seen his happiness score plummet for years. Inequality, protests, instability and now COVID-19 outbreaks have placed the region in an unusual area on the map: rich and unhappy.
Examine inequality and happiness
We’ve looked at the relationship between wealth and happiness across countries, but what about in countries?
The Gini coefficient is a tool that allows us to do just that. This measure examines the income distribution within a population and applies a score to that population. In simple terms, a score of 0 would correspond to “perfect equality” and a score of 1 to “perfect inequality” (i.e. an individual or group of beneficiaries receives the entire distribution of income).
Combined with the same happiness scale as before, this is how countries form.
While no ironclad conclusions can be drawn from this dataset, there are some overarching observations worth highlighting.
The 15 countries with the highest income inequality
|Countries with high inequalities||Happiness score||Gini score|
|🇿🇦 South Africa||5.2||0.63|
|🇨🇷 Costa Rica||6.6||0.49|
|🇧🇫 Burkina Faso||4.7||0.47|
First, countries with lower income inequality also tend to report more happiness. The 15 countries in this dataset with the highest inequality (shown above) have an average happiness score 1.3 lower than the 15 countries with the lowest inequality (shown below) .
The 15 countries with the lowest income inequality
|Low inequality countries||happy score||Gini score|
|🇨🇿 Czech Republic||6.9||25.3|
|🇦🇪 United Arab Emirates||6.6||26|
Then, interesting regional differences emerge.
Despite high income inequality, many Latin American countries have similar levels of happiness to many much wealthier European countries.
People have been seeking to understand happiness for millennia now, and sliced and dice datasets are unlikely to crack the code. Yet, like the pursuit of happiness, the pursuit of understanding is human nature.
And, more concretely, the more policymakers and the public understand the connection between wealth and happiness, the more we can shape societies that give us a better chance of living a happy life.