U.S. Is Richest Nation, But Not Happiest

In the July 1, 2010 LiveScience article "U.S. Is Richest Nation, But Not Happiest," Jeanna Bryner reports on a study that questions the relationships between money and happiness:

The United States may be the richest nation on Earth, a new study indicates, but it's not the happiest.

The new analysis of Gallup World Poll data suggests, however, that trying to compare the happiness of one nation to another is not straightforward.

Rather, there are two major categories of happiness: overall life satisfaction; and more moment-to-moment enjoyment of life. And while overall satisfaction of life is strongly tied to income, meaning richer nations and individuals have more of this overall bliss, how much one enjoys life (by measures such as laughing and smiling) depends more on social and psychological needs being met. These include having social support and using one's abilities, as opposed to sitting at a mind-numbing job.

The United States, which had the highest gross domestic product per capita, came in at No. 16 for overall well-being and No. 26 for enjoyment, referred to as positive feelings. The No. 1 spot for overall well-being went to Denmark, and New Zealand landed the No. 1 slot for positive feelings. [Happiest States Revealed]

"Everybody has been looking at just life satisfaction and income," said study researcher Ed Diener of the University of Illinois and the Gallup Organization. "And while it is true that getting richer will make you more satisfied with your life, it may not have the big impact we thought on enjoying life."

The positive feelings aspect of happiness could have evolutionary roots. "Whereas life satisfaction reflects whether people are obtaining their values and goals in a long-term and big picture sense, positive feelings seem to arise from momentary things that are prewired, since feeling good about the support of others and about using skills are both necessary for humans to thrive and survive," Diener told LiveScience.

The findings are detailed this month in the Journal of Personality and Social Psychology.

Tallying happiness

The data was collected from a representative sample of more than 136,000 people across 132 nations from 2005 to 2006. The poll used telephone surveys in more affluent areas, and door-to-door interviews in rural or less-developed regions.

For global life satisfaction, respondents indicated how they would rate their lives on a scale from zero (worst possible life) to 10 (best possible life). Participants also answered questions about positive or negative emotions experienced the previous day.

On average respondents were relatively happy, judging their current life as slightly above neutral and experiencing frequent positive feelings and infrequent negative ones. While the majority of participants indicated their psychological needs are met, about 25 percent don’t have basic needs met.

Overall satisfaction with life went up with both personal and national income, suggesting societal circumstances play an important role in happiness. But positive feelings, which were slightly higher in relation to higher income, were much more strongly tied to feeling respected, having autonomy and social support and working at a fulfilling job.

"Some of the nation rankings are indeed surprising, at least if we assumed that money was the only type of wealth," Diener said. "How do some mid-level nations in terms of income, such as Costa Rica, do so well? And conversely, why do some relatively rich nations such as South Korea do less well than expected? In part, because of the quality of social relationships."

Of course there were places that got either mostly stellar or mostly dismal happiness marks. No. 1 in overall satisfaction, Denmark also came in at No. 7 for positive feelings. Impoverished nations in Africa generally scored low on both happiness measures.

While Northern European and Anglo societies are currently most successful in the economic area, Latin American societies proved to be relatively high in social-psychological well-being. Sierra Leone scored consistently low, but other nations showed divergent rankings across the measures. For instance, Russia and South Korea had substantially lower scores for meeting social-psychological needs and in positive feelings than for income.

Why money brings overall happiness

Some economists think money increases happiness at the low end of the pay scale as it helps people meet their basic needs, but doesn’t do much once a person is lifted out of poverty. This new study suggests the link between money and happiness goes beyond basic needs. While the steepest rise in overall well-being with money occurred in the poorer individuals and nations, there was still a bump in overall happiness at the higher socioeconomic status regions.

"Money is an object that many or most people desire, and pursue during the majority of their waking hours," Diener and his colleagues write.

Since most people want money, they use their financial success as a measure of overall success and a reference for how "good" their lives are.

The study also showed the income-happiness link was tied to a person’s ownership of luxury conveniences and their satisfaction with standard of living.

“We don't know why there's a strong link between income and life satisfaction, but most economists would say it's because dollars buy stuff and humans like stuff," said Andrew Oswald, a professor of behavioral science at the Warwick Business School in England, who was not involved in the current study.

He doesn’t think "stuff" fully answers the happiness question. In addition, and possibly a more critical link between money and life satisfaction, is security. "I think it has more to do with money providing a kind of buffer against the bad shocks and insecurities of life. If you have a low income and little money in the bank, you feel much more vulnerable to the threat of layoff or the threat of sickness in your family," Oswald said in a telephone interview.

As for what happiness really means, Oswald said, "We're only beginning to scratch the surface on what happiness means and ways to measure it. It’s a multifaceted concept and researchers will be working for the next 200 years trying to get to the bottom of this."