Happiness is a state we
all strive for. In fact, the Declaration of Independence famously deems the
pursuit of happiness as an inalienable human right. While humans will always lack
a universal “key to happiness,” the importance of maintaining and promoting happiness
is often overlooked. At the end of the day, happiness allows for peace and progress.
When analyzing the causes of any given conflict, whether it be a multinational
war or a family feud, a generalized explanation could be that the involved
parties were unhappy to the point of confrontation. Unhappiness is also often a
direct result of a conflict, bringing the issue full-circle. Along with
conflict, there are other factors such as health, freedom, and living
conditions, all of which impact happiness and overall well-being. Thus, the
improvement and maintenance of happiness worldwide are crucial, as happiness
encompasses all that we strive for as individuals, and it should be the main
objective of public policy to improve the facets of domestic well-being.
It is undeniable that
money is influential to happiness. Enough money, in most cases, allows for an
absence of worry about food, water, and shelter. The well-being of those in
poverty, those who cannot sufficiently meet the basic needs of life for
themselves and/or their loved ones, would benefit from even the slightest
increase in their financial stability. One could argue intuitively that overall
happiness within a state must be explained in large part by GDP per capita
(GDPPC). After all, GDPPC is arguably the best measurement of any country’s
standard of living. However, it is my contention that the effect on happiness that
a change in GDPPC brings to a population becomes ambiguous when citizens are
not in dire need of sustenance or shelter. In large part, the happiest
countries are probably those where the average citizen can afford basic necessities
of life; however, among the happiest countries, GDPPC should not explain the state-to-state
differences in happiness.
It is fair to presume
that some countries may sacrifice a considerable percentage their population’s
happiness in order to maximize GDP. There can be severe negative externalities caused
by GDP increasing actions. For instance, cutting down rainforests to export
lumber will almost undoubtedly increase GDP per capita, but doing so would hurt
a large portion of the country’s overall happiness. Uncaring initiatives to
maximize GDP can be carried out by governments, or propagated by under-regulated
and exploitative companies. Even if these initiatives are successful in substantially
increasing a country’s GDPPC, they are probably often not worth a consequential
cutback on happiness; yet they still occur frequently. The resulting
externalities pose a possible counter to the intuitive argument that countries
with the highest GDPPC must be the happiest.
in the culture of consumerism among states might account for considerable
variation in how much the wealth of a population affects their happiness. The
rationale behind anti-consumerism is based in large part on the recognition
that the norm of materialism can result in a financial and emotional burden for
those caught up in the culture; in turn taking a toll on their happiness.
The fear of displaying a
weak socioeconomic standing is often alleviated through the purchase of status
symbols that many cannot afford. This “Keeping up with the Joneses”
social pressure might leave the lower/working class feeling inferior to their compatriots
who adhere to the idiom, or some who are left struggling to drag the weight of
their debt by the hitch of their sparkling new car. There are definitely populations
featuring hyper-consumerism in the United States, and they probably can be found
in many other countries with high GDPPCs. Inversely, populations without hyper-consumerism
and those who are unaffected by socioeconomic pressures will not see the same
decline in their happiness, that probably being especially prevalent in states
without a remarkable GDPPC.
A nation could have an
impressive GDPPC, but if freedoms like those of speech and the press are denied
or limited, the nation’s citizens will not be pleased. When the advocacy for
the well-being for citizens by the citizens in a certain state is futile,
unhappiness is augmented by helplessness. Autocratic and oppressive governments,
while some are successful in producing a strong GDP, restrict the liberties of
citizens. Citizens lacking liberty, no matter how prosperous their society is, will
feel bound to their dissatisfactions which only intensifies them further.
Gross domestic product
per capita, while far and away the most commonly used measurement of how
prosperous a country feels to its domestic population, is often very
misleading. The wealth of a country is not spread evenly. In fact, there are ongoing
movements in the United States expressing how unhappy people are with the wealth
gap. So, while a country’s GDPPC may look impressive, there still may be a vast
portion of the population seeing no benefit from this prosperity.
elements make up any one person’s happiness, and happiness can be defined a
number of ways. This ambiguity makes measuring one’s happiness difficult. For
example, ranking happiness with life would likely yield different results than
would ranking satisfaction with life. Questionnaire design is important when
analyzing the results of a survey. There has been plenty of research and data
collected on the topic of happiness.
The World Happiness
Report published by the United Nation Sustainable Development Solutions Network
(SDSN) provides easily comprehensible data from most countries around the word.
They conducted an unvarying survey asking participants to rank their happiness
on a 1-10 scale in each country. After collecting a large enough sample, they
calculated an average happiness rating for each country, which will be the ratings
used for this paper (World Happiness Report 2017). In the context of this
paper, when the “happiness” of states are discussed, said happiness refers to
the average happiness rating in each state as found by the SDSN. It is
important to recognize, however, that quantifying happiness is never exact.
Nevertheless, the data provided by the SDSN is impressive considering the
difficulty of collecting data on the happiness of a nation, let alone hundreds
The World Bank provides
an extensive and updated compilation of the GDPPCs of almost every country on
the planet, and they will be the source of GDPPC data for this paper. The World
Bank’s main initiative is to bring an end to world poverty. Useful and accurate
data are essential when setting baselines and assessing changes over time. Any
bias or inaccuracies in the data they provide would only hurt their ability to
effectively achieve their own goals. The World Bank also calculates GDPPC with
the purchasing power parity, which is preferable when analyzing the differences
between nations (World Bank 2016).
Since we are comparing
the GDPPCs of nations with many different currencies, it is useful to convert every
currency to the United States dollar. Since the data are calculated using purchasing
power parity (PPP) metrics to convert to the USD, it is important to know where
the PPP comes from. The fundamental idea behind PPP is the theory that an
exchange rate between two currencies can be found using the ratio of the
“purchasing powers” of the currencies. In essence, this is calculated by looking
at how much the goods and services in a country would cost were it sold in the United
States. If a generalized good or service can be purchased at a higher quantity,
quality, or value in one market than in another with a unit of the same
currency, there are different purchasing powers in each market. The PPP doesn’t
always correspond to market exchange rates (Investopedia 2016). The outcome of calculating
GDPPC derived from PPP is more meaningful comparisons between countries, which
makes it the most suitable metric to use for the purposes of this paper.
In accordance with my
hypothesis, I will analyze the state-to-state differences among forty happiest
countries according to the SDSN to determine whether their GDPPC explains the variation
or not. I chose to examine the top forty because I feel as though it represents
a large enough sample to where I can make meaningful comparisons and analyses. Gathering
data for the two variables is rather straightforward, as the World Happiness Report
has a downloadable sheet containing a list of virtually every country/region of
interest and their average happiness ratings in descending order. Then, I simply
obtained the GDPPCs for each of the forty happiest countries from the World
Bank’s databases, leaving me with the best data set possible.
Appendix A shows a
table displaying all of the data collected. In order to examine the data, a
scatterplot will be useful. It allows us to not only calculate the correlation
between the two variables, but also to visualize any correlation or lack
thereof. A scatterplot also makes it very easy to locate outliers and data
points of interest.
A scatterplot of the
data is shown in appendix B. Also shown in appendix B is a line of best fit
with a calculated correlation coefficient, and several labeled points of
interest. GDPPC, the explanatory variable, is shown on the horizontal axis. Happiness
rating is found on the vertical axis, as it is the dependent variable.
To begin examining the
data, first the features of the plot should be discussed. The points are widely
scattered, and there is no clear trend to the plot as a whole. Already, this
suggests that the two variables are probably not significantly correlated, in
support of my hypothesis. In fact, the correlation coefficient being 0.1597
indicates that there is close to no correlation between the two variables.
There are no glaring outliers that could be causing the lack of correlation. Even
though the best fit line does suggest that GDPPC and happiness do vary with a slight
positive trend, the lack of a strong, or even a moderate correlation refutes any
significance of the line of best fit.
Further supporting my
argument, there are countries with very low GDPPCs that still are among the happiest
countries. Guatemala for instance, as labeled in appendix B, has a GDPPC of approximately
$7,947, and is also the lowest among the included states. On the other hand, Qatar
(also labeled in appendix B) has the highest GDPPC of any nation on the planet,
at approximately $127,523. Qatar’s GDPPC being more than sixteen times greater
than Guatemala implies that Qatar has a better standard of living than
Guatemala. Guatemala is largely considered a developing country, while Qatar
certainly is not. Guatemala being among the top forty happiest countries in the
first place is unexpected. What is even more surprising, and in support of my
hypothesis, is that those living in Guatemala are happier on average than those
living in Qatar. Guatemala is happier than eleven other states as well, all of
which having higher GDPPCs than it does.
Costa Rica is another
country that is important to consider in the context of this paper. As is
common among Central American countries, Costa Rica does not have a strong GDPPC.
At about $16,614, its GDPPC is not even a third of the GDPPC the United States
enjoys. Yet, while it has the fourth lowest GDPPC out of the forty happiest
countries, Costa Rica is the twelfth happiest country on average, with a rating
not only higher than the US, but also higher than other rich and developed
nations such as the United Kingdom, Luxembourg, Germany, and Qatar.
Qatar is not the only
nation with a very high GDPPC that also as a relatively low happiness rating.
To reiterate, no country listed in appendix A has a low happiness rating. They
are all among the forty happiest. All comparisons regarding happiness between
the selected states are relative to one another. However, the expectation that
states like Qatar, Kuwait, and Singapore should be happier than the rest
because they have the highest GDPPCs is evidently incorrect. In fact, they are
all relatively unhappy. This can be seen in both appendix A and B. Kuwait is happier
than only one other state, despite having the fourth highest GDPPC among the
Upon further inspection
of the scatterplot in appendix B, there is a noteworthy collection of states
with GDPPCs ranging from $35,000 to $65,000. The eleven happiest countries are
all contained within this range, with happiness ratings from approximately 7.2
to 7.5, and make up over half of all the countries that have GDPPCs within this
range. The happiest of the happy countries all have similar GDPPCs which are
all roughly average, if not slightly above average relative to all forty states.
In support of my hypothesis, the happiest countries among the top forty happiest
are not those with the highest GDPPC, but rather states like Norway, Denmark, Iceland
and Finland, all having middle-of-the-road GDPPCs compared to the other
countries of interest.
Overall, there is
strong evidence that among the forty happiest states, GDPPC has little bearing
on the differences in happiness. It is possible that this result can be
explained by any or all of the aforementioned reasons that I used to defend my
hypothesis. However, there are several things that I failed to consider beforehand
that clearly do carry some weight on the scale of happiness among the forty
It does not take long while
looking at a map of Europe to notice that many of the countries which top the
list are European. Norway, Denmark, Iceland, Switzerland, Finland, Netherlands,
and Sweden are all among the top ten happiest. Beyond the fact that the seven
of the ten happiest countries are European, most of the listed seven are in the
even more condensed region of Northern Europe.
It had not crossed my mind before examining
the data that geography and climate could perhaps explain the differences in
happiness among the happiest countries more so than GDPPC. Also, not only are many
of the very happy countries close to one another, but they all have similar
GDPPCs, which might indicate that similar economies among close-quartered
states provides comfort for the populations in said states, having a positive
impact on their happiness. In that way, GDPPC might actually indirectly explain
part of why the happiest states are so happy.
examination of the data, it is clear that I failed to predict that the
happiness of countries, particularly those which are in the same region or
bordering each other, might be explained by a similarity in their GDPPCs. Thus,
the data does not indicate that GDPPC fails to have any effect on happiness ratings
among the forty happiest countries at all. In large part however, my prediction
was correct about the relationship between GDPPC and the average happiness
ratings among the forty happiest countries. The variation in happiness ratings
certainly could not be explained by GDPPC alone, and the different GDPPCs among
the happiest countries probably accounts for only a tiny amount of the
variation in their respective happiness ratings.