• Thursday, April 18, 2024
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Two charts show money doesn’t buy happiness

Two charts show money doesn’t buy happiness

In a world where economic prosperity is often equated with happiness, the interplay between wealth and well-being has long been a topic of debate.

It is therefore not surprising that economically viable countries in terms of Gross Domestic Product (GDP) per capita such as Luxembourg, Singapore, USA are not among the top 10 happiest nations, according to data from the World Happiness Report of 2023.

This simply aligns with a popular refrain that “money doesn’t buy happiness.”

Though several studies have made attempts to measure happiness by the amount of income earned, this yardstick is not sufficient enough as indicated by the United Nations’ World Happiness indices.

GDP per capita serves as a key indicator of a nation’s economic health. It measures the average income earned per person in a given country, providing a rough estimate of the standard of living and economic well-being.

The common assumption is that countries with higher GDP per capita should also exhibit higher levels of happiness among their citizens. While this correlation is often observed, it is not without exceptions.

Some nations with impressive economic metrics might struggle with social inequalities, mental health issues, or environmental challenges, all of which can impact overall well-being.

In its report, the World Happiness analysts considered such variables as social support, life expectancy, freedom, generosity, and the absence of corruption, in explaining varying levels of happiness between countries.

Rankings are based on individuals’ ratings of their own lives using the Cantril ladder life-evaluation question. While advanced economies generally score higher, the data also highlight exceptions.

Several emerging market and middle-income economies and even some low-income developing countries outrank their advanced economy counterparts, underscoring how factors beyond income play critical roles in determining self-reported life satisfaction.

The report offers insights into the subjective well-being of people worldwide, going beyond mere economic indicators to capture the holistic experience of happiness.

Andrew Stanley, a member of the Finance and Development Unit of the International Monetary Fund (IMF) said countries’ rankings in the World Happiness Report calls for concern, urging governments and policymakers to adopt a more holistic approach to policymaking.

In a March 2024 article titled “Looking Beyond the GDP”, Stanley posited that the report shows that progress is measured not solely by material wealth but by the well-being of their citizens.

“The report urges a reevaluation of success, advocating policies that not only foster economic growth but enhance the quality of life,” Stanley said.

“Some countries are already moving in this direction. For example, in 2019 New Zealand introduced the Wellbeing Budget, targeting critical societal areas such as mental health and child welfare,” he added.

The World Happiness Report of 2023 alongside GDP per capita figures paint a glimmering picture that wealth alone does not guarantee happiness.

Finland ranked highest on the happiness index but doesn’t hold strong among top countries in terms of GDP per capita.

The Nordic nation’s measure of wealth being $53, 654.75 is over two times lesser than that of Luxembourg which sits at the top as one of the wealthiest countries.

Despite not being the highest in terms of wealth metrics, Finland’s emphasis on social support, trust in institutions, and work-life balance contributes significantly to its citizens’ happiness.

Singapore boasts a very high GDP per capita with $72, 794 ahead of the USA ($70, 248) and China ($12, 556) ranking among the top 10 globally. This translates to strong economic performance, low unemployment, and a high standard of living.

While economically successful, the Asian country ranked 25th in the 2023 World Happiness Report. This placement is respectable but falls short of the top 10 dominated by Nordic nations.

Meanwhile, Nigeria, Africa’s largest economy is placed at 95th position out of 137 countries, showing the extent of the precarious situation of the country as citizens battle with poverty, social inequalities, huge infrastructural deficit, corruption and lack of adequate security architecture among other impending issues.

In a country where over 133 million are multi-dimensionally poor, happiness can be a scarce commodity. The World Bank revealed that 14 million Nigerians became poorer in 2023, which implies that the number of poor people rose to 104 million from 89.8 million at the beginning of last year.

As a corollary, Africa’s most populated nation boasts of a meagre $2, 065 as the measure of its cumulative wealth, underscoring the economic challenges including unemployment and income inequality, which can impact overall happiness levels.

While the country is battling with record high inflation rate, nearing 30 percent as of January 20024, the minimum wage of workers in Nigeria has remained N30,000 since 2018, an amount not enough to procure a half bag of parboiled rice.

“95th of 137 countries is not really bad, but the government and key stakeholders must intensify efforts to address insecurity, social inequalities, improve healthcare and education systems, enhance social support networks, and combat corruption,” a source familiar with the matter said.

Studies reveal that beyond a certain income threshold, additional wealth does little to enhance happiness. Instead, social connections, quality of governance, mental and physical health services, and access to education play pivotal roles in shaping well-being.

Nations that prioritise these aspects, even with moderate GDP per capita figures, often boast happier populations.

While economic prosperity undoubtedly matters, it is just one piece of the puzzle. The World Happiness Report and GDP per capita figures highlight that national happiness is a complex interplay of economic, social, and governance factors. True happiness, it seems, emerges not just from financial wealth, but from equitable societies, strong social bonds, and holistic well-being initiatives.