‘15 days of Economics’

Day 4: What is happiness?

Happiness is the satisfaction in the way that an individuals life is going. This involves how someone feels emotionally throughout the course of their life. Factors that impact the index include: income, location and biology however the best measure is relationships. The measurement is a compound index of

• GDP per Capita
• Healthy life expectancy
• Freedom to make life choices
• Social support
• Generosity
• Absence of corruption

Jeffery Sacks, the coeditor of the World Happiness Report explains that ‘these countries have a high level of prosperity, they aren’t the richest countries, they believe in a balance of life’. Balance is the forumla for happiness, this theory was introdiced by Aristotle. Balance between excess and deficiency creates good behaviour. However there is a slight link between happiness and income. Kanye West once said that ‘Having money is not everything; not having it is’. The index traces back to 1971 with the famous case of Bhutan. Instead of measuring Gross National Product, they measured Gross National Happiness as an index of productivity.

Finland and Denmark have consistently topped the leaderboards for the United Nations’ Happiness Index. In 2019 the World Happiness Report names Finland the happiest country to live in, a title that they have retained from 2018. The UK placed 15th. The top 3 countries were Finland, Denmark and Norway while the bottom 3 were Afghanistan, South Sudan and the Central African Republic. A trend seems to occur with Nordic countries including Norway, Iceland and Finland always finishing in the highest rankings. Furthermore, Finland is seen to be one of the best countries to have babies, given its great and free health care. The government also offer generous parental leave and gift to help with the baby. The country also offers free education to all.

However, there are higher taxes especially on income, but the Nordic people are happy to pay these taxes due to the services they receive in return. The government also pays a major role in the people’s happiness. They support a lot of the citizen’s basic needs which majorly help people shape their lives. Due to this, there is much less poverty, injustice, crime and feeling of inequality.

The correlation between money and happiness is shown again by Nordic countries having an average annual income 25% smaller than the U.S, yet they are happier. Money matters for wellbeing and happiness, however only being without money affects happiness. Usually, diversity increases happiness however, Finland is very homogenous. Furthermore, in Finland people are entitled to a payed vacation which increases productivity and happiness.