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Money can’t buy you happiness, as the old adage goes. But…says who? What if it can? In fact, what if money actually does buy happiness? Our experts at Moneyzine.com have compared the wealth of countries across the globe with their happiness score according to the World Happiness Index…and the results might surprise you.
If money has no root correlation with how happy a person is, why do countries with a higher GDP per capita also score highly in the World Happiness Index?
Unhappiest countries also amongst the poorest
When comparing the wealth of countries across the world - using the most common measure of wealth, GDP per capita - with each country’s happiness score according to the World Happiness Index 2023, we found a direct correlation between the two data sets.
The countries with a lower GDP tend to score lower to overall happiness (with Afghanistan last overall), while there is a clear trend line between happiness and GDP as each increases.
Although there are of course a few outliers, the trend is clear for all to see: more wealth, more happiness.
However, there are some deviations and outliers. With a GDP per capita of $52,429, Hong Kong's (HK) Happiness Index score of 5.47 is relatively low compared to many countries with similar Happiness Index scores.
Equally, however, Costa Rica has almost the same high-scoring World Happiness Index figure as Ireland (7.06 and 7.08 respectively), but the two countries are at opposite ends when we look at their GDP Per Capita - Costa Rica scoring far higher for happiness than other countries with a similar GDP, and Ireland scoring lower in comparison.
Wealth, happiness, and quality of life
What’s more, there is an almost identical correlation between the GDP of each country and their quality of life index score.
The higher a country’s GDP per capita, however, the more they fall behind in terms of quality of life score.
Some of the wealthiest countries (Singapore, Luxembourg, Norway), are also the ones that score lower for quality of life than one might expect following the correlation of the graph. That said, however, these countries still score highly for both factors.
It would appear that, after all, money does have a direct influence on the overall happiness of a country. While of course it may be too prescriptive to say that the citizens of wealthier countries are happier than those in poorer countries, the correlation between happiness scores and higher GDP is too strong to ignore.
What perhaps needs to be investigated further, however, is what came first? The money, or the well-being?Jonathan Merry, CEO of Moneyzine.com
What Is The World Happiness Index?
The 2023 World Happiness Report marked 10 years since its first iteration, and has come to be a key indicator of the success of a country.
The index uses unique data collected from individuals across 146 countries, surveying key variables such as life satisfaction, social support, freedom, and other factors that are believed to affect overall well-being.
Measuring A Countries Wealth
One of the most common ways to gauge the wealth of a country is to look at their GDP per capita. According to World Economic Outlook, GDP - gross domestic product - is the most commonly used measure of a country’s overall economic activity.
GDP represents the “the total value at current prices of final goods and services produced within a country during a specified time period divided by the average population for the same one year”.
Money Doesn’t Buy Peace
Another factor we compared was the GDP per capita of countries against the global peace index score, (where on a scale of 1-5, a lower score indicates a more peaceful country).
While a small correlation can be drawn between these two factors (with a slight trend towards higher GDP countries equalling higher-scoring countries for peace index), the difference compared to the previous two factors is notable.
Many countries with a low GDP per capita score as high or even higher, in several cases, for peacefulness. The global peace index, for reference, is created by ranking factors such as the level of Societal Safety and Security, the extent of Ongoing Domestic and International Conflict, and the degree of Militarisation.
While conclusions can certainly be drawn from a correlation between the happiness and wealth of a country, that wealth does not necessarily extend to the safety and peacefulness of a country - and likewise, a poor country does not always indicate a volatile one.
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