Drumroll, please… the annual World Happiness Report is expected to come out this week. Of course, crowds won’t be waiting with bated breath like they did when Taylor Swift announced her newest album. But it’s a fun news story nonetheless, especially for anyone interested in well-being and happiness trends.
Conducted by the United Nations with data collected from the Gallup World Poll, the report evaluates respondents’ answers across 14 areas, such as business and the economy, education and families, government and politics, health, etc., in an attempt to come up with a measurement for national happiness. Like many surveys of this sort, it’s not without its shortcomings; but the report provides some lively conversation around what makes up well-being and the factors that influence it.
Over the last few years, the United States has been inching up in the rankings, coming in at 15th place last year on the list of the world’s happiest countries, up from 16th in 2022 and 19th in 2021. Who knows, perhaps 2024 will be the year we finally break into the top ten, or even displace Finland who has held the number one position for the past six years!
While 15th place might be considered a decent rank for some, many view it as a poor showing for the U.S. considering its global economic dominance. With the largest GDP of the bunch and arguably more economic opportunities as whole, isn’t it surprising that there is not a greater correlation between overall wealth and happiness?
From an individual stand-point (vs. a societal one), there has been much research conducted on the relationship between money and the extent to which it contributes to life satisfaction. One famous U.S. study published by Daniel Kahneman and Angus Deaton on individual well-being and income levels concluded that beyond a $75,000 annual income, happiness levels seemed to plateau (in today’s dollars, that would be around $106,000).
A more recent study published in 2023 by the Proceedings of the National Academy of Sciences seemed to contradict these findings, suggesting that happiness continues to increase as income rises, up to $500,000 annually. After re-examining both sets of data, researchers concluded that happiness does indeed plateau at the lower income level, but only for about 20 percent of those surveyed. For the majority of people, however, happiness and income steadily rose together; and, for a small sector, there was even a sharp, accelerated increase in reported well-being as income rose.
As you can imagine, there are myriad reasons that could point to why money could “buy happiness.” Having a higher income can ease stress around resources; can provide a sense of security as well as autonomy; and, when spending correlates with values and the PERMA model of well-being, can be a tool for flourishing. One common example cited is when individuals have wealth to spend on experiences such as travel which can reinforce positive emotions; another example is with more means, individuals have more opportunities give back to communities and charitable endeavors, thus increasing a sense of meaning and purpose, one of the five components of Positive Psychology.
Going back to the World Happiness Report, that doesn’t mean that money alone can solve all of one’s problems. Instead, other areas of contentment, such as community and leisure, also contribute to one’s sense of happiness. While rich in resources, American’s over-emphasis on individualism, consumerism, and productivity may erode overall well-being. Finland, on the other hand, enjoys strong social equality, social networks, government safety nets (which may replace the need for individual income), a cultural emphasis on being outdoors and a healthier work-life balance, to name a few factors.
Of course, measurements of societal happiness are different from individual psychological well-being and we have to be careful not to apply findings too broadly. But there can be some overlap too, with one area of research potentially informing the other to a degree.
Whatever results come out this week, questions around money and happiness – from individual happiness to how that happiness translates to a national ranking and global arena – will continue to benefit from further research and debate.
Stay tuned for Part 2 when we’ll reveal how the U.S. fared in the 2024 Report and more related insights!