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||Median Wealth per Adult (US$)||Happiness Score|
|🇳🇿 New Zealand||171,624||7.2|
|🇺🇸 United States||79,274||7.0|
|🇨🇿 Czech Republic||23,794||6.9|
|🇬🇧 United Kingdom||131,522||6.9|
|🇨🇷 Costa Rica||14,662||6.6|
|🇦🇪 United Arab Emirates||21,613||6.6|
|🇸🇦 Saudi Arabia||15,495||6.5|
|🇸🇻 El Salvador||11,372||6.1|
|🇰🇷 South Korea||89,671||5.9|
|🇧🇦 Bosnia and Herzegovina||15,283||5.8|
|🇩🇴 Dominican Republic||22,701||5.7|
|🇭🇰 Hong Kong SAR||173,768||5.4|
|🇿🇦 South Africa||4,523||5.2|
|🇨🇮 Côte d'Ivoire||6,621||5.2|
|🇲🇰 North Macedonia||51,788||5.2|
|🇬🇲 The Gambia||658||5.2|
|🇧🇫 Burkina Faso||622||4.7|
|🇱🇰 Sri Lanka||8,802||4.4|
|🇨🇩 DR Congo||356||4.4|
|🇸🇱 Sierra Leone||370||3.6|
|🇸🇸 South Sudan||2,677||2.9|
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.
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|
|🇨🇷 Costa Rica||6.6||0.49|
|🇧🇫 Burkina Faso||4.7||0.47|
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|
|🇨🇿 Czech Republic||6.9||25.3|
|🇦🇪 United Arab Emirates||6.6||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.
Mapped: How Much Does it Take to be the Top 1% in Each U.S. State?
An annual income anywhere between $360,000-$950,000 can grant entry into the top 1%—depending on where you live in America.
How Much Does it Take to be the Top 1% in Each U.S. State?
There’s an old saying: everyone thinks that they’re middle-class.
But how many people think, or know, that they really belong to the top 1% in the country?
Data from personal finance advisory services company, SmartAsset, reveals the annual income threshold at which a household can be considered part of the top 1% in their state.
Some states demand a much higher yearly earnings from their residents to be a part of the rarefied league, but which ones are they, and how much does one need to earn to make it to the very top echelon of income?
Ranking U.S. States By Income to Be in the Top 1%
At the top of the list, a household in Connecticut needs to earn nearly $953,000 annually to be part of the one-percenters. This is the highest minimum threshold across the country.
In the same region, Massachusetts requires a minimum annual earnings of $903,401 from its top 1% residents.
Here’s the list of all 50 U.S. states along with the annual income needed to be in the 1%.
|Rank||State||Top 1% Income|
|Top 1% Tax Rate
(% of annual income)
California ($844,266), New Jersey ($817,346), and Washington ($804,853) round out the top five states with the highest minimum thresholds to make it to their exclusive rich club.
On the other end of the spectrum, the top one-percenters in West Virginia make a minimum of $367,582 a year, the lowest of all the states, and about one-third of the threshold in Connecticut. And just down southwest of the Mountain State, Mississippi’s one-percenters need to make at least $381,919 a year to qualify for the 1%.
A quick glance at the map above also reveals some regional insights.
The Northeast and West Coast, with their large urban and economic hubs, have higher income entry requirements for the top 1% than states in the American South.
This also correlates to the median income by state, a measure showing Massachusetts households make nearly $90,000 a year, compared to Mississippians who take home $49,000 annually.
How Much Do the Top 1% Pay in Taxes?
Meanwhile, if one does make it to the top 1% in states like Connecticut and Massachusetts, expect to pay more in taxes than other states, according to SmartAsset’s analysis.
The one-percenters in the top five states pay, on average, between 26–28% of their income in tax, compared to those in the bottom five who pay between 21–23%.
And this pattern exists through the dataset, with higher top 1% income thresholds correlating with higher average tax rates for the wealthy.
|State Ranks||Median Tax Rate|
These higher tax rates point to attempts to reign in the increasing wealth disparity in the nation where the top 1% hold more than one-third of the country’s wealth, up from 27% in 1989.
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