Happiness as such is undoubtedly hard, if not the hardest, thing to evaluate and to quantify. Both GINI Coefficient and GDP trackers provide us with big picture of individual's or nations's l well-being that focuses on income and its distribution across the country. Cynics might say that those two are not an accurate measure of the country's well-being as there is more to happiness than an income alone. While to some extent this is true because high GDP means nothing if people cannot afford basic amenities or healthcare or if their opportunities in terms of education and employment are limited, it is not a terrible indicator after all. Income is related to the absence of poverty, unemployment and education levels, health and other opportunities that we value in life and that determine our well-being. As money is only a fraction of what is broadly perceived as happiness, what we really want to know is the actual quality of life as felt and reflected by individuals in the given society. In other words sustainable development is not about rising the income per se but more about raising human well-being which can be both measurable and hard to capture. Let's focus on those aspects that can be measured first.
We already know that in order to get the full picture we need to consider differences across the country, across the society. It is because in measuring the inequalities, and as we will later see - in analyzing world challenges, everything is synergistic, nothing exists in the vacuum. For that reason United Nations Development Program has invented so called Human Development Index or HDI which takes an average of three basic dimensions to determine human satisfaction in life therefore providing more holistic picture of human development.
The three areas it looks into are as follows:
At a first glance, the above map looks similar to the map gross domestic product per capita but if we look closer we will notice some striking differences. Angola in Africa for example, country known for its major hydrocarbons economy, strikes high on the income per capita but its education and health outcomes are still very low. The same applies to Equatorial Guinea with the rapid increase of GDP per capita over last couple of years due to its recent oil and gas discoveries. Why high GDP rates do not translate to the countries scoring high on HDI? Well, one of the reasons is the allocation of the revenue. Whether the rent collected from mineral deposits of the countries is used to support and improve living conditions or is it lost as a result of corruption or to a small group of the society like politicians or others in power.
World Happiness Report, that you will find on the sidebar, takes the HDI findings to a whole new level. It ranks 156 countries across six variables: GDP per capita, life expectancy, social support, generosity, freedom of choice and perception of corruption. It also includes the well-being of immigrants in 117 of those countries. Not surprisingly, countries that scored high on GINI Coefficient find themselves at the very of the top of the World Happiness list. Why do you think that is? Which of the variables mentioned above or your own plays the most crucial role in defining human happiness? How do you determine happiness? To me it is peace and security. Freedom from conflict.
Leave a comment below and share what in your opinion make a happy country!
The other side of the coin is human well-being measured in essence by simple 'Are you happy'? Now, there are two types of happiness:
The first one comes forth when asking someone emotionally How was your day? Were you happy? etc. It elicits mostly positive emotions. Similar like when we ask someone How are you? and in 99% we will hear I am good. To me this measure is not particularly objective as the answer to asking someone emotionally will very much depend on the cultural schema and so while in US you will most certainly hear back I am good thanks, in Poland in 80% of the time the answer will be closer to So, so, Tired etc. Perhaps more reliable dimension of happiness is therefore evaluative happiness. This is measured when we ask someone how do they evaluate their life, are they satisfied with their lives. It is more deep in essence and gives us better overview on where individual feel they are both on the social ladder and in the broader context of economic development. Here we can also learn about other aspects that matter to us such as social life and network, mental health, physical well-being, whether we are happy with our government etc.
We can see that more often than not high levels of happiness is the attribute of rich countries. But also of unequal countries like US when it comes to social inclusion. One important lesson for us is that income is only one aspect of happiness, relatively easily measured and evaluated but by no means exclusive when we want to find the real side of nation's well-being, stripped from numbers and data but focusing on these things in life that although hard to capture are the ones that keep us going.
We have arrived at the point where we know that in order to see the full picture of the country's prosperity, we not only need to take into account the average level of income but also measure the inequality of income across the households and people within the country we are interested in.
So how do we do that?
There are multiple ways to measure the inequality of income within the country but the one I would like to focus on today is the GINI Coefficient. The general assumption behind this method is that 0 means perfect quality (everybody has the same income), whereas 1 means complete inequality (such that one person in the country owns everything). Both of the extremes are of course unrealistic and all of the countries find themselves somewhere in between.GINI Coefficientis used to measure the distribution of an income or wealth within a country but is not a measurement of an absolute wealth of a country.
Closest to 0 and thus the lowest inequality level tends to be in Western Europe and especially in Scandinavia (around 0.25). Countries like Sweden, Norway and Denmark have relatively equal income distribution and therefore a broad middle class. There are relatively little devastating differences within the society like super rich and very poor. USA on the other hand is quite unequal in income distribution when we compare it to Canada or Western Europe and especially countries in Scandinavia. Here we have many billionaires compared to a lot of very poor people so the gap between them is really vast. Of course the poverty levels in US are not extreme, to the extent like we see in developing countries, but if we compare it to the top 20%, the difference is devastating.
As it was perfectly put by Professor Jeffrey Sachs from the University of Columbia in New York 'Getting richer doesn't mean necessarily becoming more equal'. We can see it very clearly if we compare the map of GDP and GINI Coefficient distribution in the world. According to Professor Sachs there is no one pathway for development. He concluded that Northern Europe has chosen a pathway of becoming wealthier with a lot of social equality which is indeed true for Scandinavia but the same cannot does not apply to Poland for example. Right on the other side of the ocean, in the United States, the path of rising incomes alongside rising inequality is prevailing and the gap between very rich and very very poor widening.
Where do these inequalities come from?
Why is education so important in closing the gap of social inequality?
The answer to this has many layers and you will find them in many of my posts depending which aspect of social justice or gender equality we will be currently discussing. For now however, we need to remind ourselves that attaining higher education almost alway translates to higher income which in turn to the successful contribution to the modern economy. Young people who have the chance to attain it either by means of their own hard work or family's support and material situation will play important role in country's economic development in the future. Those who are less lucky are often stuck in their own communities, with no access to adequate training and in turn balancing at the very low income level employment.
There are other inequalities of course such as race, gender, religion etc. All of them lead to massive discrimination in the labor market and has an adverse effect on the country's economy. The origin and consequences of the above however will be discussed in more detail in future posts as they are complex and extremely important to understand in order to find the way to fight them and finally achieve the complete social inclusion without which sustainable development will not be possible.
China used to be fairly equal around 50 years ago before the economic boom took place. Why was it equal at that time? Think about the world before industrial revolution...what did people do? Where did they live?
What is the World Happiest Country?
Find out by visiting World Happiness Report 2018
Do you know?
There is a consistency between happiness of immigrants and happiness of those born locally.
Gross National Income
GNI = GDP + net income from foreign countries
How to make America HAPPY again...