Friday, 24 February 2012

Happiness, money and where you live

Research company Ipsos has conducted a poll of 19,000 adults from 24 countries, asking each of the respondents some simple questions on their happiness levels.

Two interesting findings were:

Finding #1: Overall everybody seems to be happier: 3 percentage points higher than the eve of the recession in 2007 i.e. 77% vs 74%.
Finding #2: The happiest people come from poor to middle income countries.  People from Italy and Spain seem more pessimistic.  (If I had to speculate, I would say the Euro zone crisis is the mood dampener the instances of Italy and Spain.  Let's not tread near Greece.)

Happiness vs GDP per person in each country.  The U.S.A. is less happy than Indonesia in spite of having 10 times the amount of wealth per person.

Developing nations do not share the pessimism of industrialised countries, say Ipsos.  This is perplexing on the face of it, because while developing nations have fared better through the recession than first world countries, the bottom line is that places like Italy, America and Germany are richer and still have a higher standard of living.  In most cases they are safer too.

Why are first world citizens unhappy?
So why the gloom in the first world?  The reason has to be the law of diminishing returns or the law of marginal utility, where every incremental increase brings in less satisfaction or utility than the increment before it.  When you eat a Ferrero Roche chocolate for the first time in a year it will taste like heaven.  Twelve Ferrero's down plus a tummy ache and you won't want to see it for a good few days after that.  Drive a Ferrari for the first time and you're in motoring Nirvana.  Drive it every day for three months and it becomes little more than a mode of transport and a status symbol. 

Anything eventually becomes "normal" for you and where it initially made you happy, soon enough it just becomes part of your life.  What's happened is that affluence had become "normal" for many in the richer countries.  Then as soon as the global recession hit, suddenly what they took for granted or even as their birthright was under threat.  When anybody's way of life is in jeopardy they react adversely, and nevermind if they don't actually lose anything: it's the mere threat to their way of life that increases a human being's anxiety...and we all know that happiness and anxiety are not complementary.

Poor people have a lower fear of loss
People in countries like India and Bangladesh were poor from the get go.  They always had to make do with no resources before 2008 and guess what, when the recession hit and we panicked about losing everything, it was just business as usual for them.  They didn't see the value of their properties drop or retirement savings dwindle, because many of them had neither of these.  Each day is the same as before for the poor: they need to get out there, hustle and scrape together a living from informal activities like subsistence farming and street trading.  Life - be it in 1998, 2008 or 2012 - has been pretty much the same for them.  And with the poor happiness is found more easily as a simple hot meal or companionship around a bonfire on a cold night are enough to make them smile.  With readily hot food, TV and central heating, middle to upper class people don't bat an eyelid in appreciation of such things.

The happiest countries according to this study are Indonesia, India and Mexico.  Happiness is an important if difficult to measure metric.  It cannot be truly measured by a poll and some questions, admittedly.  Polls however do give an indication and presidents looking to be re-elected and indeed any country looking to move forward needs a happy population.   Technical advancement and affluence mean nothing if people are anxious, stressed and pessimistic.

For you as an individual, what is the quick answer to being more happy?  As a start you need to be able to appreciate a hot meal, a good conversation, and a warm bed.  These things are unlikely to lead to complete fulfillment, but if you can't acknowledge them then the other things will also be taken for granted.  Your life will become a repetitive, perpetually dissatisfying sequence of wanting something, acquiring it then hankering for something else once you get it.  Sure, enjoy the finer more expensive pleasures of life, but appreciate them in the context of the simpler things too.  Your life will be all the richer for it.  As The Economist remarked: "Perceived happiness depends on a lot more than material welfare."

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