What is happiness?
After my last blog, The Myth Of European Happiness Part 2, readers by and large seemed to accept that Americans are indeed richer than Europeans, even when you account for greater income inequality in the US. Some still objected that big chunks of US GDP can hardly be said to benefit consumers, for example the high level of health care spending that delivers inferior health outcomes. Fair enough, but (1) working in health care still generates income; and more importantly (2) across Europe, almost half of GDP is government expenditure, and so much of it is manifestly wasteful that the US still comes out ahead.
Many reactions however turned against my original point, namely that Americans are happier than Europeans. Some readers offered vivid descriptions of everything that is wrong with US society. Nothing I disagree with, but again, I could easily reciprocate with exhaustive lists of what’s wrong with European societies. And as I noted in my response, you can argue that Americans should not be happy — but Americans are telling you that they are happy.
Which is why some comments have zeroed in on the data themselves. Can the World Happiness Report index really capture happiness? What is happiness anyway?
Are you happy now?
The World Happiness Report relies on a Gallup survey which asks one deceptively simple question on “life evaluation”: respondents are asked to evaluate their life as a whole on a scale from 0 to 10 (0 = worst possible life; 10 = best possible life). Results are averaged over a three-year period.
The survey also gauges positive and negative emotions: respondents are asked whether on the previous day they experienced a significant amount of laughter, enjoyment, and engagement in interesting things, or a significant amount of worry, sadness and anger. These are yes/no questions. Positive and negative emotions do not enter into the happiness score, but are used as additional information in the analysis. This makes sense, because it would be odd to add together a three-year-long life assessment with yesterday’s sentiments.
As you might expect, the WHR analysts have also asked themselves what contributes to happiness. They have identified six variables that seem to account (in a statistical sense) for about three-quarters of it: GDP per capita (money!), social support, heathy life expectancy, freedom, generosity and corruption. The report includes statistical estimates of the contribution to happiness (the 0-10 life evaluation score) for each of these variables .
So, as I often do, I decided to have some fun with the numbers.
Money, money, money
“Happiness can’t be all about money!” was the strongest reaction I got to my previous blog, because I showed a chart with a clear positive correlation between happiness and median real income. Luckily, the WHR estimates the contribution of income to the happiness score. Surely once we subtract it we will find that happiness (other than what we directly derive from money) has no correlation whatsoever with income?
Source: World Happiness Report; World Bank
Oh. The positive correlation looks just as strong. Ok, but we also know that medical care and health outcomes tend to be better in countries with higher income, so if we also take out the contribution of healthy life expectancy we’ll get that happiness (other than what we derive directly from money and good health) has no correlation whatsoever with income, right?
Source: World Happiness Report; World Bank
Damn. Still a strong positive correlation. It’s beginning to look like more money really does make people happier. And keep in mind that this is a sample of mostly very well-off countries. If we looked at a more comprehensive set encompassing emerging markets, I would expect even stronger effects: the average income difference between say India and Norway is also reflected in a wide difference in infrastructure, public services, etc., all things that shape the quality of daily life. If you are a policymaker and want to make your country’s citizens happier, your best bet is to try and boost economic growth.
If you are a policymaker and want to make your country’s citizens happier, your best bet is to try and boost economic growth.
Yes, but are you really happy or just depressed?
Does the happiness score really capture happiness? Surveys, as I cautioned in the last blog, should be taken with a pinch of salt. The neuroscientist Olivier Oullier pointed me to a recent article where he notes that the top four countries in the happiness index (Finland, Denmark, Iceland and Sweden) also rank in the top twelve for the use of antidepressants (Iceland at #1, Sweden #6, Finland #11 and Denmark #12). A flippant reaction would be that, well, clearly the pills are working…. but there is something here.
To dig a bit deeper I have taken suicide data from the World Population Review. The chart below plots the same set of countries we’ve been looking at so far.
Source World Population Review: (number of suicides per 100k inhabitants)
The US does not look good, but Finland and Sweden are right up there. If Finland is the happiest country in the world, why does it have a suicide rate six times that of Turkey, ranked #98 in happiness? I don’t have a good answer. But Finland must be an outlier. Maybe because of the cold, long dark winters. Surely across countries there is a strong negative correlation between happiness and suicides, with happier countries suffering a much lower incidence of people taking their own lives?
Actually not. The trend line is pretty flat. There seems to be absolutely no correlation between happiness and suicides.
How can this be? My only guess is that the happiness score does a poor job of capturing the most unhappy people. But that’s a weak answer, and this evidence does strengthen the case for improving the methodology, along the lines recommended by Oullier in his article.
On the other hand, it can also be misleading to dismiss the survey results we don’t like by saying, “those people can’t possibly be happy! Or at least they should not be happy!” Happiness, as a reader pointed out on LinkedIn, depends partly on your circumstances and partly on your attitude. The fact that you think you would not be happy in my shoes does not mean that I can’t be happy.
So the best we can do is to keep taking surveys, and compare them with observed actions. Some actions will in some cases contradict the surveys, as we’ve seen with suicides. Others will confirm them: the WHR shows people tend to move from less happy to happier countries, as I posited in my first blog. (And the newcomers quickly partake in the local happiness: the report finds little difference in happiness between immigrants and local population.)
Finally, we should draw a clear distinction between personal advice and policy recommendation. Happiness is subjective, so only you can know what life choices can make you happy. But if you are a policymaker, again, your best bet to raise collective happiness is to spur economic growth.
Oh, and speaking of subjective happiness, in the US it’s almost time for that other famous life evaluation question: are you better off now than you were four years ago?…
Marco
What about statitics?
Is happieness only a financial matter?
Suicide - do you believe the caputre of suicide in Finland (Nordics for that matter) is the same as in Turkey. If you make assuptions based upon statistics it is most important to analyze how tHey are collected - or?
Have always appreciated tour presentations at GE - but hope you had better basis for you conclusions.
Sorry..-
Hans
Marco. I miss our discussions.! I am surprised that the discussion of happiness and money is inverted. Personal fulfillment engenders happiness and people who achieve it are by and larger more productive and thus accumulate greater rewards including fortune , fame and power. Money doesnt create happiness. HAPPINESS follows fulfillment and success whicH results in rewards. Money doesn't assure happiness but success more often assures happiness. American are happier because we are more succesaful and there for both rich and wealthy We could have fun parsing that