Norway has the highest quality of life.

According to a United Nations report, Norway has the highest quality of life in the world. Read more here.

According to the 2010 Human Development Reports, the world rankings are:

Human Development Index (HDI) - 2010 Rankings

Very High Human Development

Norway
Australia
New Zealand
United States
Ireland
Liechtenstein
Netherlands
Canada
Sweden
Germany
Japan
Korea (Republic of)
Switzerland
France
Israel
Finland
Iceland
Belgium
Denmark
Spain
Hong Kong, China (SAR)
Greece
Italy
Luxembourg
Austria
United Kingdom
Singapore
Czech Republic
Slovenia
Andorra
Slovakia
United Arab Emirates
Malta
Estonia
Cyprus
Hungary
Brunei Darussalam
Qatar
Bahrain
Portugal
Poland
Barbados

High Human Development

Bahamas
Lithuania
Chile
Argentina
Kuwait
Latvia
Montenegro
Romania
Croatia
Uruguay
Libyan Arab Jamahiriya
Panama
Saudi Arabia
Mexico
Malaysia
Bulgaria
Trinidad and Tobago
Serbia
Belarus
Costa Rica
Peru
Albania
Russian Federation
Kazakhstan
Azerbaijan
Bosnia and Herzegovina
Ukraine
Iran (Islamic Republic of)
The former Yugoslav Republic of Macedonia
Mauritius
Brazil
Georgia
Venezuela (Bolivarian Republic of)
Armenia
Ecuador
Belize
Colombia
Jamaica
Tunisia
Jordan
Turkey
Algeria
Tonga

Medium Human Development

Fiji
Turkmenistan
Dominican Republic
China
El Salvador
Sri Lanka
Thailand
Gabon
Suriname
Bolivia (Plurinational State of)
Paraguay
Philippines
Botswana
Moldova (Republic of)
Mongolia
Egypt
Uzbekistan
Micronesia (Federated States of)
Guyana
Namibia
Honduras
Maldives
Indonesia
Kyrgyzstan
South Africa
Syrian Arab Republic
Tajikistan
Viet Nam
Morocco
Nicaragua
Guatemala
Equatorial Guinea
Cape Verde
India
Timor-Leste
Swaziland
Lao People's Democratic Republic
Solomon Islands
Cambodia
Pakistan
Congo
São Tomé and Príncipe

Low Human Development

Kenya
Bangladesh
Ghana
Cameroon
Myanmar
Yemen
Benin
Madagascar
Mauritania
Papua New Guinea
Nepal
Togo
Comoros
Lesotho
Nigeria
Uganda
Senegal
Haiti
Angola
Djibouti
Tanzania (United Republic of)
Côte d'Ivoire
Zambia
Gambia
Rwanda
Malawi
Sudan
Afghanistan
Guinea
Ethiopia
Sierra Leone
Central African Republic
Mali
Burkina Faso
Liberia
Chad
Guinea-Bissau
Mozambique
Burundi
Niger
Congo (Democratic Republic of the)
Zimbabwe

Note: The HDI rankings featured above were published in the Human Development Report 2010, The Real Wealth of Nations: Pathways to Human Development. Information about the HDI. PDF version Table 1 - Human Development Index and its components [108 KB].

Limitations of Using GDP as a Measure of Quality of Life

Gross domestic product and its related concepts (such as real GDP, per capita GDP, and per capita real GDP) are incomplete measures of a country’s standard of living. There are many productive activities that are not included in GDP because it only measures output produced and sold in legal markets. It does not include productive activity that does not have a market transaction.

Although GDP and its related concepts are useful in measuring a country’s output, income, and standard of living, they are not perfect measures of quality of life. Quality of life refers to the amount of fulfillment people have in life. There are also many aspects of the quality of life that are not considered in the calculation of output, such as leisure, the environment, and the quality of people’s health.

Criticisms of GDP data as measurements of quality of life include:

1. GDP only measures the output produced and sold in legal markets.
It does not include productive activity that does not have a market transaction.

Some Economic Activity Does Not Occur in Legal Markets and thus is Not Included in GDP
Activities INCLUDED In Gross Domestic Product (GDP)	Activities NOT INCLUDED In Gross Domestic Product (GDP)
Hiring a lawn service to mow your yard.	Mowing the lawn yourself.
Taking your children to a day-care center.	Caring for your children yourself.
Hiring a plumber to fix a water leak at your house.	Fixing the water leak yourself.
Prostitution in some counties of Nevada (where it is legal).	Prostitution in most of the rest of the U.S. (where it is illegal).

2. GDP does not consider how output contributes to the quality of people’s lives.
It simply measures how much output a country produces. For example, people who live in urban areas spend a portion of their incomes on products to help them cope with urban problems. For example, urban residents buy more alarm systems for their homes and cars, self-defense classes, and stress medication. Some economists refer to these products as "bads" rather than "goods".

Suppose you live in a rural area. If you move into the city, you can change to a job that pays you $1000 more per year. Suppose urban life causes you to spend $1000 per year on things you did not need living in a rural environment. Even though your income is larger, has moving to the city improved the quality of your life?

3. GDP does not measure the quality of the environment.
A country might be able to increase its output (and GDP) if it eases pollution regulations. Yet, having higher per capita real GDP might not mean people have a better quality of life if the air, water, and other resources are more polluted.

4. GDP does not consider how leisure contributes to the quality of life.
A country could increase its output (and GDP) if its people worked 12 hours per day, seven days per week. However, having more products might not mean people are better off if they have no leisure time to enjoy it.

Virtually all data have limitations. Even though GDP data are not perfect measures of the quality of life in a country, they are still useful in measuring the standard of living.

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