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.
Ranked: Top Countries for Foreign Direct Investment Flows
Take a look at changes in foreign direct investment flows over a decade, analyzing the top destinations and biggest investors.
One of the most significant phenomena in 21st-century globalization, driven by the ascent of multinational corporations and the removal of investing barriers, is the vast cross-border flow of foreign capital.
To analyze recent trends, Samidha Nayak utilized World Bank data spanning 2012–2022, charting the top 10 destinations for foreign direct investment (FDI) and the leading investing countries annually.
Countries With the Most FDI Inflows (2012–2022)
In 2012, the United States had the highest FDI inflow, attracting about $250 billion in investment from the rest of the world.
At second place, China’s FDI inflows stood about $9 billion lower at $241 billion.
The middle ranks have representatives from Europe (Netherlands, Cyprus), from Asia (Hong Kong) and from South America (Brazil).
Towards the bottom, three OECD countries—Germany, Ireland, and Australia—all attracted an average of $60 billion in foreign investment.
Unexpectedly, the British Virgin Islands came in 8th. Their lack of corporate tax makes it a popular place for companies to headquarter, in turn attracting FDI inflows.
|1||🇺🇸 U.S.||$250.35||1||🇺🇸 U.S.||$388.08|
|2||🇨🇳 China||$241.21||2||🇨🇳 China||$180.17|
|3||🇳🇱 Netherlands||$239.67||3||🇸🇬 Singapore||$140.84|
|4||🇧🇷 Brazil||$92.57||4||🇭🇰 Hong Kong||$120.95|
|5||🇭🇰 Hong Kong||$74.89||5||🇫🇷 France||$105.42|
|6||🇨🇾 Cyprus||$69.97||6||🇧🇷 Brazil||$91.50|
|7||🇩🇪 Germany||$65.44||7||🇦🇺 Australia||$67.12|
|8||🇻🇬 British Virgin Islands||$61.12||8||🇨🇦 Canada||$53.71|
|9||🇮🇪 Ireland||$58.09||9||🇸🇪 Sweden||$50.05|
|10||🇦🇺 Australia||$57.55||10||🇮🇳 India||$49.94|
Ten years later however, the top 10 saw a shuffle. The U.S. and China retained their top spots, but the difference grew much larger—with the U.S. attracting nearly 50% more foreign investment ($388 billion) than China ($180 billion).
Singapore, which first appeared in the rankings in 2014, took third place with $141 billion.
Meanwhile the bottom half changed almost entirely with France, Canada, Sweden, and India replacing Cyprus, Germany, the British Virgin Islands, and Ireland.
Countries With the Most FDI Outflows (2012–2022)
Unlike the ranks of net inflows, the top 10 countries with the highest FDI outflows have stayed essentially the same.
The U.S. topped the list in both ends of the decade, despite briefly falling out of the top 10 entirely in 2018. There were only three new entrants (France, Australia, and the UK) in 2022 compared to 10 years prior, with Cyprus, Switzerland, and the British Virgin Islands dropping out of top spots.
|1||🇺🇸 U.S.||$377.24||1||🇺🇸 U.S.||$426.25|
|2||🇳🇱 Netherlands||$237.94||2||🇩🇪 Germany||$178.87|
|3||🇯🇵 Japan||$117.63||3||🇯🇵 Japan||$175.40|
|4||🇩🇪 Germany||$99.08||4||🇬🇧 UK||$158.93|
|5||🇭🇰 Hong Kong||$88.12||5||🇨🇳 China||$149.69|
|6||🇨🇾 Cyprus||$75.25||6||🇳🇱 Netherlands||$125.89|
|7||🇨🇳 China||$64.96||7||🇦🇺 Australia||$123.36|
|8||🇨🇦 Canada||$62.25||8||🇫🇷 France||$118.76|
|9||🇨🇭Switzerland||$54.30||9||🇭🇰 Hong Kong||$106.86|
|10||🇻🇬 British Virgin Islands||$53.94||10||🇨🇦 Canada||$83.11|
Many of the countries who are in the top ranks for inflows (U.S., China, Canada, Australia) are also in the top ranks for outflows both in 2012 and 2022.
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