Measuring Happy

If life is a kind of process, or a series of processes, then “happiness” is probably one of the main outcomes or “outputs.” As process professionals, our reflex is to think about how to measure process outcomes or outputs in the form of a “critical to performance” (CTP) metric.

A recent article in The Economist reports not only on the measurement of happiness but also how different countries are faring on happy:

…in 2014, 54% of rich-country respondents counted themselves as happy, whereas in emerging markets the percentage jumped to 51% (see chart). This was happening just at a time when emerging markets’ chances of converging economically with the West seemed to be receding.

Rich countries did not experience steep declines in happiness. The decreases in America and Britain were tiny (a single percentage point), while the share of happy Germans rose 13 points. A large drop in formerly joyful Spain ensured a modest overall decline for the rich. But the convergence happened thanks to huge improvements in countries such as Indonesia (+35) and Pakistan (+22). In 12 of the 24 emerging markets, half or more people rate their life satisfaction in the top tiers of the ladder.

This is not to say the link between income and satisfaction has been snapped. Poor countries still lag behind: only a quarter of the people there are in the happy tiers—half the level of the other two groups. There is also a clear link between happiness and income growth (as opposed to income levels). China’s GDP rose at an annual average rate of 10% in 2007-14 and its happiness level rose 26 points.

Within countries, richer people express more satisfaction than their poorer neighbours. The study divided respondents into categories with higher and lower incomes and fewer and more household goods. In every country in every group, richer folk with more goods expressed higher levels of happiness. So at a personal (as opposed to national) level, money does buy happiness. And if you ask people about different aspects of their lives—health, family life, religion, standard of living—it turns out that satisfaction with living standards still has the biggest influence on happiness.

But the secret of happiness has been scattered around. Women tend to be happier than men. Married people are happier than unmarried ones. Latin Americans are more satisfied than people in other emerging markets. Asians are the most optimistic; Middle Easterners the least. Income still matters. But it has been dethroned.