Below is a very good video from CNBC outlining why Finland and Denmark have consistently topped the United Nations’ most prestigious index, The World Happiness Report. It features well known economist Jeffrey Sachs, the Director of the Centre for Sustainable Development at Columbia University. Especially useful when most countries still but a lot of emphasis on GDP as a leading indicator of how well its economy is progressing.
The World Happiness Report for 2022 was published in March and it is interesting to see what data is used to generate their rankings. The colour-coded sub-bars in each country row represent the extent to which six key variables contribute to explaining life evaluations. These variables (shown in Table 2.1) are:
- Healthy Life Expectancy: Life expectancy at birth based on data from WHO.
- Social Support: Someone to help you in times of trouble. National average of binary responses either 0 or 1.
- Freedom to make life choices: Yes of No to “Are you satisfied or dissatisfied with your freedom to choose what you do with your life?”
- Generosity: national average of response to the Gallup World Poll (GWP) question “Have you donated money to a charity in the past month?”.
- Corruption Perception: “Is corruption widespread throughout the government or not” and “Is corruption widespread within businesses or not?” The overall perception is just the average of the two 0-or-1 responses.
- GDP per capita: purchasing power parity (PPP) at constant 2017 international dollar prices.
You will notice Dystopia as a variable. This is an imaginary country that has the world’s least-happy people. The purpose of it is to have a benchmark against which all countries can be favourably compared (no country performs more poorly than Dystopia) in terms of each of the six key variables. This permits the calculated contributions from the six factors to be zero or positive for every actual country. The happiness rankings are not based on any index of these six factors—the scores are instead based on individuals’ own assessments of their lives, as revealed by their answers to the single-item Cantril ladder life-evaluation question below:
“Please imagine a ladder, with steps numbered from 0 at the bottom to 10 at the top. The top of the ladder represents the best possible life for you and the bottom of the ladder represents the worst possible life for you. On which step of the ladder would you say you personally feel you stand at this time?”
Finland remains in the top position for the fifth year running, followed by Denmark in 2nd and all five Nordic countries among the top eight countries, joined by Switzerland, the Netherlands and Luxembourg. France reached its highest ranking to date, at 20th, while Canada slipped to its lowest ranking ever, at 15th, just behind Germany at 14th and followed closely by the United States and the United Kingdom at 16th and 17th. New Zealand comes in at 10th.
Among the six variables used to explain these levels, there has been general growth in real GDP per capita and healthy life expectancy, generally declining perceptions of corruption and freedom, declining generosity (until 2020), and fairly constant overall levels of social support.