Money can’t buy you happiness

I agree with Jeffrey Sachs that we must aim for wellbeing and sustainability, and not just wealth. Whilst there is a correlation between wellbeing and wealth, it is not as strong as one might imagine, so perhaps it is indeed true that money can’t buy you happiness, let alone love.

Here is the quote by Jeffrey Sachs from the World Happiness Report blog published last Friday, which inspired me to do this little analysis:

“We need urgently to learn from Covid-19,” said Jeffrey Sachs. “The pandemic reminds us of our global environmental threats, the urgent need to cooperate, and the difficulties of achieving cooperation in each country and globally. The World Happiness Report 2021 reminds us that we must aim for wellbeing rather than mere wealth, which will be fleeting indeed if we don’t do a much better job of addressing the challenges of sustainable development.”

The correlation between wealth and happiness

There are many measures of wealth, but for this analysis I decided to take GDP per Capita as a good indication of the wealth of a country. The analysis of the top 20 ‘happiest’ countries indicates a weak correlation between happiness and wealth (an r value of around 0.4), with the correlation being even weaker if one looks at GDP based on purchasing power parity:

World Happiness Report Ranking*

GDP (nominal) per capita ranking (IMF) **

GDP (at purchasing power parity) per capita ranking***

Visualised, using nominal GDP per capita as the wealth measurement, the lack of correlation is very clear to see:

World Happiness Report Ranking*

GDP (nominal) per capita ranking (IMF) **

I think the chart raises a lot of interesting discussion points, but two stand out to me:

USA, UK, Ireland, Germany – could and should do better  

Given very high GDP per capita numbers these 4 countries possess, I believe they certainly can and should rank higher on happiness/wellbeing. I wonder what it would take for the political powers in these countries to make this ranking one of their KPIs and act accordingly?

Costa Rica – setting an example on conservation

I thought it was great to see Costa Rica still on the top 20 list of ‘happiest’ countries. The country has for a while now been doing some great work in the area of conservation, and I recently read that it has even higher ambitions for the future:

The UN SDGs as a means to wellbeing for all

I believe that the attainment of the  UN Sustainable Development Goals, would go a long to bringing well-being and happiness, if not to all, then at least to many more people in many more countries. I proud that Quandrum is on a mission to its bit to help those goals be achieved by the end of the decade.

Andrew Cannon

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