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Charting the Relationship Between Wealth and Happiness, by Country

This is a syndicated repost published with the permission of Visual Capitalist. To view original, click here. Opinions herein are not those of the Wall Street Examiner or Lee Adler. Reposting does not imply endorsement. The information presented is for educational or entertainment purposes and is not individual investment advice.

The Relationship Between Wealth and Happiness, by Country

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. 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 table below looks at 146 countries by their happiness score and wealth per adult:

Country Wealth per Adult (US$) Happiness Score
Finland 73,775 7.8
Denmark 165,622 7.6
Iceland 231,462 7.6
Switzerland 146,733 7.5
Israel 80,315 7.4
Sweden 89,846 7.4
Norway 117,798 7.4
Netherlands 136,105 7.4
Luxembourg 259,899 7.4
Austria 91,833 7.2
New Zealand 171,624 7.2
Australia 238,072 7.2
Germany 65,374 7.0
United States 79,274 7.0
Ireland 99,028 7.0
Canada 125,688 7.0
Czech Republic 23,794 6.9
United Kingdom 131,522 6.9
Belgium 230,548 6.8
France 133,559 6.7
Bahrain 14,520 6.6
Costa Rica 14,662 6.6
United Arab Emirates 21,613 6.6
Slovenia 67,961 6.6
Saudi Arabia 15,495 6.5
Uruguay 22,088 6.5
Romania 23,675 6.5
Kosovo 46,087 6.5
Singapore 86,717 6.5
Taiwan 93,044 6.5
Spain 105,831 6.5
Italy 118,885 6.5
Lithuania 29,679 6.4
Slovakia 45,853 6.4
Qatar 83,680 6.4
Malta 84,390 6.4
Brazil 3,469 6.3
Panama 13,147 6.3
Guatemala 30,586 6.3
Estonia 38,901 6.3
Nicaragua 3,694 6.2
Kazakhstan 12,029 6.2
Serbia 14,954 6.2
Chile 17,747 6.2
Latvia 33,884 6.2
Cyprus 35,300 6.2
Uzbekistan 7,821 6.1
El Salvador 11,372 6.1
Mexico 13,752 6.1
Poland 23,550 6.1
Hungary 24,126 6.1
Mauritius 27,456 6.1
Kuwait 28,698 6.1
Croatia 34,945 6.1
Argentina 2,157 6.0
Honduras 15,380 6.0
Portugal 61,306 6.0
Japan 122,980 6.0
Philippines 3,155 5.9
Jamaica 5,976 5.9
Moldova 7,577 5.9
Thailand 8,036 5.9
Greece 57,595 5.9
South Korea 89,671 5.9
Kyrgyzstan 2,238 5.8
Mongolia 2,546 5.8
Colombia 4,854 5.8
Belarus 12,168 5.8
Bosnia and Herzegovina 15,283 5.8
Malaysia 8,583 5.7
Dominican Republic 22,701 5.7
Paraguay 3,644 5.6
Bolivia 3,804 5.6
Peru 5,445 5.6
China 24,067 5.6
Vietnam 4,559 5.5
Russia 5,431 5.5
Ecuador 5,444 5.5
Turkmenistan 9,030 5.5
Montenegro 30,739 5.5
Nepal 1,437 5.4
Tajikistan 1,844 5.4
Armenia 9,411 5.4
Bulgaria 17,403 5.4
Hong Kong  SAR 173,768 5.4
Libya 6,512 5.3
Bangladesh 3,062 5.2
South Africa 4,523 5.2
Indonesia 4,693 5.2
Azerbaijan 5,022 5.2
Ivory Coast 6,621 5.2
Albania 15,363 5.2
North Macedonia 51,788 5.2
Gambia 658 5.2
Liberia 1,464 5.1
Laos 1,610 5.1
Algeria 2,302 5.1
Ukraine 2,529 5.1
Morocco 3,874 5.1
Congo 582 5.1
Senegal 1,570 5.0
Georgia 4,223 5.0
Gabon 4,685 5.0
Mozambique 345 5.0
Niger 492 5.0
Cameroon 941 5.0
Ghana 2,198 4.9
Iraq 6,378 4.9
Venezuela 7,341 4.9
Iran 7,621 4.9
Guinea 938 4.9
Turkey 8,001 4.7
Burkina Faso 622 4.7
Comoros 1,466 4.6
Nigeria 1,474 4.6
Cambodia 2,031 4.6
Uganda 646 4.6
Benin 890 4.6
Pakistan 2,187 4.5
Namibia 3,677 4.5
Kenya 3,683 4.5
Tunisia 6,177 4.5
Mali 869 4.5
Myanmar 2,458 4.4
Sri Lanka 8,802 4.4
DR Congo 356 4.4
Egypt 6,329 4.3
Chad 355 4.3
Madagascar 666 4.3
Mauritania 1,037 4.2
Yemen 1,223 4.2
Ethiopia 1,527 4.2
Jordan 10,842 4.2
Togo 468 4.1
India 3,194 3.8
Malawi 606 3.8
Zambia 692 3.8
Tanzania 1,433 3.7
Haiti 193 3.6
Sierra Leone 370 3.6
Botswana 3,680 3.5
Lesotho 264 3.5
Rwanda 1,266 3.3
Lebanon 18,159 3.0
South Sudan 2,677 2.9
Afghanistan 734 2.4

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.

Data visualization showing the relationship between inequality and happiness around the world

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

The 15 Countries With Highest Income Inequality

Countries with High inequality Happiness Score Gini Score
🇿🇦 South Africa 5.2 0.63
🇳🇦 Namibia 4.5 0.59
🇿🇲 Zambia 3.8 0.57
🇨🇴 Colombia 5.8 0.54
🇲🇿 Mozambique 5.0 0.54
🇧🇼 Botswana 3.5 0.53
🇿🇼 Zimbabwe 3.0 0.50
🇵🇦 Panama 6.3 0.50
🇨🇷 Costa Rica 6.6 0.49
🇧🇷 Brazil 6.3 0.49
🇬🇹 Guatemala 6.3 0.48
🇭🇳 Honduras 6.0 0.48
🇧🇫 Burkina Faso 4.7 0.47
🇪🇨 Ecuador 5.5 0.47
🇨🇲 Cameroon 5.0 0.47
Average 5.2 52

First, countries with lower income inequality tend to also 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 Lowest Income Inequality

Countries with low inequality Happy Score Gini Score
🇸🇰 Slovakia 6.4 23.2
🇧🇾 Belarus 5.8 24.4
🇸🇮 Slovenia 6.6 24.4
🇦🇲 Armenia 5.4 25.2
🇨🇿 Czech Republic 6.9 25.3
🇺🇦 Ukraine 5.1 25.6
🇲🇩 Moldova 5.9 26
🇦🇪 United Arab Emirates 6.6 26
🇮🇸 Iceland 7.6 26.1
🇧🇪 Belgium 6.8 27.2
🇩🇰 Denmark 7.6 27.7
🇫🇮 Finland 7.8 27.7
🇳🇴 Norway 7.4 27.7
🇰🇿 Kazakhstan 6.2 27.8
🇭🇷 Croatia 6.1 28.9
Average 6.5 26

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.

Where does this data come from?

Source: Credit Suisse Global Wealth Databook 2021, World Happiness Report 2022, World Bank

Data notes: This visualization includes countries that had available data for both happiness and wealth per adult. Credit Suisse notes that due to incomplete data, the following countries are estimates of average wealth per adult: North Macedonia, Kosovo, Guatemala, Dominican Republic, Honduras, Uzbekistan, Côte d’Ivoire, and South Sudan. Happiness data for countries is from the 2022 report, with the exception of: Qatar, DRC, Haiti, and South Sudan, which pull from the 2019 report. For Gini Coefficient calculations, only countries with data from 2014 onward were included. As a result, major economies such as India and Japan are excluded from that visualization.

Chart note: The wealth axis was plotted logarithmically to better show the trend visually. This approach is often used when a small number of results skew the visualization, making it harder to glean insight from. In this case, there are large extremes between the richest and poorest countries around the world.

The post Charting the Relationship Between Wealth and Happiness, by Country appeared first on Visual Capitalist.

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