Happiness Index 2018: Is it really possible to rank countries by their happiness?

The Sustainable Development Solutions Network recently released its publication of the 2018 Happiness Report. The report, edited by world renowned economists, John Helliwell (University of British Columbia), Richard Layard (London School of Economics), and Jeffrey Sachs (Columbia University), ranks 156 countries, supposedly according to their level of happiness for 2015-2017.

While the report is interesting, it cannot be taken at face value.

Since countries differ a great deal, most cross-sectional studies on peoples’ sentiments that involve many countries are difficult to interpret and can even be misleading. They are done partly because they lend themselves to expediency and because we live in an era of fascination with data, scores, and rankings and the belief that everything can be quantified.

The study estimates happiness using GDP per capita, social support, life expectancy, freedom to make life choices, generosity, and perceptions of corruption. The top five happiest countries according to the study are (1) Finland, (2) Norway, (3) Denmark, (4) Iceland, and (5) Switzerland. The bottom five countries are (152) Yemen, (153) Tanzania, (154) South Sudan, (155) Central African Republic, and (156) Burundi.

It is worth noting the rankings of the following countries: Libya is 70th, Somalia 98th, Democratic Republic of Congo 132th, Afghanistan 145th, and Syria 150th. Somehow we are to believe that Tanzanians are more melancholy than the populations of war-torn countries and failed states. Remarkably, we are to assume that peace and stability do not contribute much to happiness.

While the absurdity of the rankings of a handful of countries does not render the whole study meaningless, it does highlight the challenges of quantifying sentiments like happiness. This is especially the case for a broad study like this which does not, and maybe cannot, provide qualifying remarks for each country in the study. There was some attempt in the study to qualify the rankings of Tanzania, Rwanda, and Botswana, but only in some very general way, as follows: “Tanzania, Rwanda and Botswana have anomalous scores, in the sense that their predicted values based on their performance on the six key variables, would suggest they would rank much higher than shown by the survey answers.”

There may be broad alignment on the abstract drivers of happiness such as economic development and opportunity but identifying accurate numerical representations of these drivers is much more challenging. GDP per capita is one general way of measuring economic development, but it obscures the composition of the economic output, the conditions under which products are produced, and how income is distributed.

Generosity is another example. It is reasonable to assume that a population’s generosity could both contribute to and reflect its happiness. However, generosity is expressed in many different forms and gestures. To measure generosity, the study asked the following question: “Have you donated money to a charity in the past month?” Is this really an appropriate way of measuring generosity across the globe? Hardly.

This question has little relevance whatsoever to the vast majority of people in developing countries. Yet people in those countries are very generous in contributing their time and skills to various community initiatives. Moreover, even in countries where monetary donations to charities are common, donations are not solely driven by generosity, but also by the tax benefits of charitable contributions. Following last year’s tax reform in the US, which reduced the deductibility of charitable contributions, the Los Angeles Times carried an article headlined, “The GOP tax reform will devastate charitable giving.”

As a footnote, the difference in happiness is also explained by many factors that are difficult to measure, such as expectations, spiritual outlook, value systems, and social and cultural norms.

The World Happiness Report provides some valuable information, but don’t read too much into it. Just be happy!

The columnist is a professor of economics, La Salle University, Philadelphia, Pennsylvania, US