Happiness in Countries: Does Greater Wealth Equal Happiness

Within this argument lies two theories. On one hand some people believe that in many cases YES a wealthier country will experience higher happiness, but on the other hand there are many economists who think that there is NO relationship

Evidence for a Connection

So does a higher GDP have permanent effects on a nation’s happiness? GDP does help buy extra happiness. But other factors have been forming throughout the years that have gradually offset the benefits of extra real income. To make this correlation easier to find we used the ‘GDP in a happiness Regressions’ equation, provided in the essay, The Macroeconomics of Happiness.” The equation is as follows:

Description

• HAPPYjit: well-being level reported by an individual ‘j’ in country ‘i’ in the year ‘t’
• GDPit: Gross Domestic Product per capita in that country
• PERSONALjit: Personal characteristics of respondents (income, marital status, education, employed/unemployed, age

Below is a Comparison of the USA's GDP and it's fluxuations compared to average happiness survey fluxuations that occured during the same time frame. As you can see, if you visually compare the data there are similar peaks and valley's in both. Each corresponding to one another quite drastically.

Graph here.

In another recent survey, Hagerty and Veetoven rexamined this concept in regards to many foreign countries. Breaking up the countries into high, medium, and low GDP/per capita allowed them to make an easy comparison of average happiness scores. They had argued that previous economist who were against the idea that the wealth of countries equaled happiness had not taken an accurate measure lower GDP/capita countries and dealt mainly with middle to higher income countries. This plays such a large role as as wealth of nations continually increase, there is an increasing at a decreasing effect on GDP and happiness