It Appears Money Can Buy Happiness After All…

It Appears Money Can Buy Happiness After All…

Throughout history, the pursuit of happiness has been a preoccupation of humankind.

Of course, we humans are not just content with measuring our own happiness, but also our happiness in relation to the people around us – and even other people around the world. The annual World Happiness Report, which uses global survey data to report how people evaluate 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.

Love.

Purpose.

Wealth.

As Visual Capitalist’s Nick Routley details below, the first three examples are tough to measure, but the latter can be analyzed in a data-driven way.

Does money really buy happiness? Let’s find out…

Wealth and Happiness

To crunch the numbers, we looked at data from Credit Suisse, which breaks down the average wealth per adult in various countries around the world.

The chart below looks at 146 countries by their happiness score and wealth per adult:

While the results don’t definitively point to wealth contributing to happiness, there is a strong correlation across the board. Broadly speaking, the world’s poorest countries have the lowest happiness scores, and the richest report being the most happy.

Regional and Country-Level Observations

While many of the countries follow an obvious trend (more wealth = more happiness), there are nuances and outliers worth exploring.

In Latin America, people self-report more happiness than the trend between wealth and happiness would predict.

On the flip side, many nations in the Middle East report slightly less happiness than levels of wealth would predict.

Political turmoil, an economic crisis, and the devastating explosion in Beirut have resulted in Lebanon scoring far worse than would be expected. Over the past decade, the country’s score has fallen by nearly two full points.

Hong Kong has seen its happiness score sink for years now. Inequality, protests, instability, and now COVID-19 outbreaks have placed the region in an unusual zone on the chart: rich and unhappy.

Examining Inequality and Happiness

We’ve looked at the relationship between wealth and happiness between countries, but what about within countries?

The Gini Coefficient is a tool that allows us to do just that. This measure looks at income distribution across a population, and applies a score to that population. Simply put, a score of 0 would be “perfect equality”, and 1 would be “perfect inequality” (i.e. an individual or group of recipients is receiving the entire income distribution).

Combined with the same happiness scale as before, this is how countries shape up.

While there is no ironclad conclusion that can be derived from this dataset, there are big picture observations worth highlighting.

The 5 Countries With Highest Income Inequality

First, countries with lower income inequality tend to also report more happiness. The 5 countries in this dataset with the highest inequality (shown above) have an average happiness score 1.3 lower than the 5 countries with the lowest inequality (shown below).

The 5 Countries With Lowest Income Inequality

 

Next, interesting regional differences emerge.

 

Despite high income inequality, many Latin American countries report levels of happiness similar to many much-wealthier European nations.

The Bottom Line

People have been seeking understanding on happiness for millennia now, and it’s unlikely that slicing and dicing datasets will crack the code. Still though, much like the pursuit of happiness, the pursuit of understanding is human nature.

And, in more concrete terms, the more policymakers and the public understand the link between wealth and happiness, the more likely we can shape societies that give us a better chance at living a happy life.

Tyler Durden
Thu, 09/08/2022 – 22:00

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