How To Measure Happiness : The Indicator from Planet Money The U.S. is one of the world's largest economies, but it lags when it comes to happiness: the World Happiness Report ranks America number 19.
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How To Measure Happiness

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How To Measure Happiness

How To Measure Happiness

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Happiness - it is the thing we are all striving for in life, right? I mean, it is how you achieve the good life.


Yes, but it can be so elusive.


GARCIA: Like, what makes you happy? Is it relationships? Is it your job?



VANEK SMITH: Maybe coffee (laughter)?

GARCIA: Absolutely.

VANEK SMITH: Definitely in there for me.

GARCIA: I had a stronger reaction to coffee...

VANEK SMITH: (Laughter).

GARCIA: ...Than to money, which is a little odd.

VANEK SMITH: (Laughter).

GARCIA: But seriously, it is hard to know. And it can feel even harder to know precisely because it is so difficult to measure.

JOHN HELLIWELL: (Laughter) That's - it's - the fact that people are uneasy about how you might measure it may have been why economics became narrower than it should have been a couple of centuries ago.

GARCIA: This is economist John Helliwell. John is with the Vancouver School of Economics at the University of British Columbia.

HELLIWELL: I'm one of the editors of the World Happiness Report.

VANEK SMITH: The World Happiness Report - John and his team released the first one back in 2012. Among other things, it uses six measures to help gauge and rank the happiness of different countries. And the one for 2018 just came out.



GARCIA: And I'm Cardiff Garcia. Happiness - how do you measure it?

VANEK SMITH: Also, can money get you there? Turns out, the answer is not no.

GARCIA: Not no, right. Relationship status, money and happiness - it is complicated.

VANEK SMITH: Very complicated.


VANEK SMITH: Today's indicator is 19. The Happiness Report rated all the countries in the world in terms of their happiness. And of course, I immediately just looked at the list to see where the U.S. was in this ranking. And it was at No. 19.

GARCIA: But behind Belgium, which was No. 18, Israel at 13 and Australia at No. 11 - yes, we were also behind Iceland, which is in fourth place. In third place is Norway. And in second place is Denmark.

VANEK SMITH: Of course, John Helliwell told me that not obsessing about rankings (laughter) was actually one of the secrets for the country that came in at No. 1.

GARCIA: And isn't it ironic?

VANEK SMITH: The happiest country on Earth - Finland.

GARCIA: Darn you, Finland.


HELLIWELL: There's things called the Jones Effect. This is the idea that people think of their rank as being important...

VANEK SMITH: Oh, is this like keeping up with the Joneses?

HELLIWELL: It's exactly what it's like.

VANEK SMITH: Oh, OK (laughter) - the Jones Effect.

HELLIWELL: That's exactly what it's like.

GARCIA: So does this mean one of the reasons that Finland is so happy is because they don't care about how much happier they are than everybody else?

VANEK SMITH: John said...

GARCIA: Probably? (Laughter).

VANEK SMITH: ...Yes - exactly yes.

HELLIWELL: When we've talked to Finns, is this as much a problem there as elsewhere, they say no. Actually, we don't think it is. And the reason is that there's kind of a social norm in Finland that you don't display your wealth, you don't talk about your income and you don't ostentatiously consume. And they then said - well, that means these comparator effects are more or less absent there.

VANEK SMITH: So Finland for the win - happiest place on Earth.

GARCIA: Not that they're bothering to rub it in.


GARCIA: They're too busy dealing with six months of darkness.

VANEK SMITH: (Laughter).

GARCIA: That's right. That's right.

VANEK SMITH: Take that, Finland.

GARCIA: Hashtag #USAStillWinningInTheLight.

VANEK SMITH: (Laughter) Exactly.


VANEK SMITH: All right. All right. OK. But now to the economics of the whole thing - how do you measure happiness? John Helliwell says there are six measures that they use to help determine a country's rank in the Happiness Report. Some of them are pretty standard economic measures, and some of them are a little squishier.

GARCIA: Squishy is the...

VANEK SMITH: Yeah, it's a little squishy.

GARCIA: ...Right word. Yeah.

HELLIWELL: Two of them are standard development indicators, which is GDP per capita and healthy life expectancy.

GARCIA: The life expectancy one, that's pretty straightforward.

VANEK SMITH: Gross domestic product per capita - so gross domestic product is basically the sum total of all the goods and services a country produces in a year. And per capita, per person is meant to basically give a rough idea of how wealthy people are in a particular country.

GARCIA: Measure No. 3 has to do with how much people trust the government and businesses inside their country.

HELLIWELL: Do you think corruption is a problem in your country in business and then - a second one - in government? And then we take the average of those two.

VANEK SMITH: So life expectancy, GDP per capita, corruption - and the fourth happiness indicator, something called social support.

HELLIWELL: Particular Gallup question is - do you have somebody to count on in times of trouble?

VANEK SMITH: And No. 5, generosity.

HELLIWELL: The national average is based on, have you been generous in the last 30 days to others?

VANEK SMITH: And finally, No. 6, freedom.

HELLIWELL: Did you feel a sense of freedom to make your key life decisions? It turns out that's very important across countries.

GARCIA: So in sum, to measure happiness, John and his team used measures of GDP per capita, life expectancy, corruption, social support, generosity and freedom. And the reason that he used these six measures is because they had been found to be highly correlated with people's overall happiness.

VANEK SMITH: But John says there are two that seem especially powerfully correlated with people's happiness. No. 1, social support - that is, do you have people you can count on in times of trouble? No. 2, GDP per capita.

GARCIA: Yep - money. For the most part, the higher a country's GDP per capita, the happier its people tend to be.

VANEK SMITH: But John points out there are a few notable exceptions to this - China, India and the U.S.


VANEK SMITH: (Laughter) I know. I know. In all three countries, GDP per capita was up between 2017 and 2018. But happiness levels, as John and his team measured them, were down.

GARCIA: And this is something that economists refer to as the Easterlin paradox. It's the idea that wealth adds to people's happiness only up to a point. And at some point, for some reason, getting richer stops making you happier.

VANEK SMITH: Now, John thinks this paradox is happening for different reasons in China and India versus the U.S. In China and India, John thinks they're experiencing a kind of, you know, disruptive effect that often comes along with an economy that's evolving really fast.

HELLIWELL: The decline of the extended family and the elimination of a lot of these social ties and social supports and the huge movements away from the countryside towards the cities have posed problems for happiness even if income per capita rose a lot.

GARCIA: In the U.S., John says, he thinks the paradox is being caused by something else entirely.

HELLIWELL: People overestimate the happiness they're going to get from more income or a bigger house. And they underestimate the happiness they would get from more time with the family and less time spent commuting. So they end up finding themselves in circumstances where they've chosen to go for too high an income, too much consumption, not enough time to spend with family and friends. And they end up being anxious, harried, stressed.

VANEK SMITH: So that's John's theory. There are other ideas about why the Easterlin paradox exists in the U.S., one of them could be that GDP is growing so GDP per capita is going up but that it's less evenly spread throughout the population than it used to be. And so people are unhappy about growing inequality in the U.S.

GARCIA: And some economists say that the Eastern paradox isn't really a thing, that it all depends on how happiness is measured because, as we said before, it's a really, really tricky thing to nail down.

VANEK SMITH: Nonetheless, John says, as humans, our priorities do seem to play a major role in our happiness. In fact, he says, researching happiness has changed his own priorities.

HELLIWELL: I used to be more desk-bound, more solitary and more inclined to read the elevator's safety certificate rather than talk to the other people in the elevator.

VANEK SMITH: (Laughter).

HELLIWELL: And what I've learned in these years is that that's simply bad psychology - that to start conversations with strangers, to smile at people in the streets, to assume the best rather than the worst about them is a win-win situation. And so I do it more than I used to. And that's improved my happiness. And I hope it's improved somebody else's, as well. But that was...

VANEK SMITH: But that's easy for you to say. You're in Canada. You guys are No. 9.

HELLIWELL: Well, I mean...


VANEK SMITH: Come on, America. We can do this.


VANEK SMITH: Be generous. Be there for your friends.

GARCIA: Yeah. We are going to climb the happiness rankings even if it makes us miserable. All right?

VANEK SMITH: Yes, we are.

GARCIA: So talk to people in elevators. Your country's happiness depends on it.


GARCIA: (Chanting) USA.

VANEK SMITH: We're No. 1 - not that we - not that we care...


VANEK SMITH: ...Not that we're looking.

GARCIA: No, I'm checked out. I don't even know where we are in the rankings.

VANEK SMITH: No. Were we No. 1?

GARCIA: Totally...

VANEK SMITH: ...'Cause I didn't even...

GARCIA: ...Disinterested.

VANEK SMITH: Oh. You know, I'm just...

GARCIA: Whatever.

VANEK SMITH: I don't pay a lot of attention...


VANEK SMITH: ...To how other people rank me. It's more about, like, me feeling like I'm improving.


Finland, you're going down in 2019.

VANEK SMITH: We're crushing them.


VANEK SMITH: This episode of THE INDICATOR was produced by Constanza Gallardo, edited by Paddy Hirsch. Our intern is Willa Rubin. And THE INDICATOR is a production of NPR.


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