How to measure happiness (“prosperity”) across countries

Here is a topic just perfect for a Research Methods class discussion about conceptualization and operationalization: how to measure happiness across countries. Here is a quick summary of how the Legatum Institute measured this and found that Norway is the happiest country in the world:

With this in mind, five years ago researchers at the Legatum Institute, a London-based nonpartisan think tank, set out to rank the happiest countries in the world. But because “happy” carries too much of a touchy-feely connotation, they call it “prosperity.”

Legatum recently completed its 2010 Prosperity Index, which ranks 110 countries, covering 90% of the world’s population.

To build its index Legatum gathers upward of a dozen international surveys done by the likes of the Gallup polling group, the Heritage Foundation and the World Economic Forum. Each country is ranked on 89 variables sorted into eight subsections: economy, entrepreneurship, governance, education, health, safety, personal freedom and social capital.

The core conceit: Prosperity is complex; achieving it relies on a confluence of factors that build on each other in a virtuous circle.

Ultimately how happy you are depends on how happy you’ve been. If you’re already rich, like Scandinavia, then more freedom, security and health would add the most to happiness. For the likes of China and India (ranked 88th), it’s more a case of “show me the money.” What they want most of all? The opportunity to prove to themselves that money doesn’t buy happiness.

Some quick thoughts on this:

1. This is a lot of dimensions and indicators to consider: 89 measures, 8 subcategories.

2. The change from “happiness” to “prosperity” is an interesting one. Happiness is indeed a fuzzy term. But prosperity often refers to material wealth in terms of income or buying power. This prosperity defined more broadly: material wealth plus freedoms plus level of services plus social interactions. The Legatum Website suggests the Index is “the world’s only global assessment of wealth and well-being.”

3. I would be curious to know how comparable the data is across countries and across the organizations that form and ask these survey questions.

4. In this complexity, it is interesting to note that prosperity means different things to countries in different stages.

5. Even with all of these measures, which measures are used and how this Institute weights these particular factors would matter for the outcome. For example, the story at Forbes suggests that improving a nation’s entrepreneurial culture could make a big difference in these rankings. And the United States is ranked #1 in health care because “$5,500 a year in per-capita health spending has resulted in excellent vaccination rates, water quality and sanitation.” The Legatum Institute itself seems to put a big emphasis on business.

6. How come so many of these lists come from Forbes? Beyond the answer that Yahoo has a deal with Forbes for content, this is an interesting way to drive web traffic: top ten lists that catch people’s attention. How useful these sorts of lists are is debatable but they are often interesting and quickly summarize complex areas of life.