Are Health, Wealth and Happiness Linked Worldwide?

Levitt and Dubner have blogged quite a bit about the growing literature on happiness studies. Meanwhile, the media has been abuzz recently over the relationship (or possible lack thereof) between happiness and wealth.

Enter Angus Deaton, a professor of economics and international affairs at Princeton. Deaton has a published new paper, “Income, Aging, Health and Wellbeing Around the World: Evidence from the Gallup World Poll,” that analyzes the results of a 2006 poll in which participants from 132 countries were asked identical questions on topics including standard of living, personal health, and their country’s healthcare system.

Deaton compared the data on “health and life satisfaction” (also described as “happiness”) to national income, age, and life expectancy. In some aspects, his findings aligned with the conventional wisdom that wealth brings happiness:

Like earlier studies using a smaller range of countries … the citizens of richer countries are on average more satisfied with their lives than the citizens of poorer countries. Unlike … earlier studies, [the] effect of income is not confined to poor, unhappy countries, but extends right across the range, from Cambodia, Sierra Leone, Togo, Niger, and Chad, which share the unenviable distinction of being in the bottom ten countries both by income and by life-satisfaction, to Norway, Switzerland, Denmark, Australia, and Canada, which rank in the top ten according to both income and life-satisfaction. Each doubling of national income is associated with a near one unit increase in average life-satisfaction measured on an eleven point scale from 0 (“the worst possible life”) to 10 (“the best possible life”). If anything, the effect of national income on national happiness is somewhat stronger in the rich countries than in the poor countries.

But this intuitive result becomes counterintuitive in the following scenario:

Recent growth in national income, unlike income itself, lowers average life-satisfaction. This result appears to be new, and contradicts much earlier literature that argues that improvements in living standards make people better-off, but that the effect wears off over time.

His findings on life satisfaction, meanwhile, directly contradict the idea that countries with high adult mortality rates (such as African nations ravaged by AIDS) would have correspondingly low rankings in life and health satisfaction. In fact, Deaton writes, “HIV prevalence in Africa has little effect on Africans’ life or health satisfaction; the fraction of Kenyans who are satisfied with their personal health is the same as the fraction of Britons and higher than the fraction of Americans.”

As for Americans’ rating of their own health and medical resources, Deaton had this somewhat remarkable finding to report:

Particularly remarkable is the position of the largest rich country, the United States, where only 52 percent of the population express themselves satisfied with the healthcare and medical system, a figure that is not only much lower than the comparable figure in any other rich country — for example, in Britain the fraction is 63 percent — but also lower than the fractions in (to take a few examples from many) India, Iran, Sierra Leone, or Malawi. The US ranks 81st among the 115 countries for which these data were collected … Indeed, the fraction of Kenyans who are satisfied with their personal health is the same as the fraction of Britons, and is higher than the fraction of Americans.


Robert

is it possible that Americans rank relatively lower partially because we expect more from our health care system? everyone here wants the best and is disappointed with anything less.

BN

Possibly worldwide, but exclude the US from that list. People aren't becoming happier here. Happy = rich? You have to look at the particular things that make people happy, not at the general trend. Things that make people happy in the US (home prices, NYSE indexes, employment rates, owning new cars, etc) do fluctuate a lot throughout a year, so happines rate is different every month or so. It highly depends on the market conditions, whereas in Fjij or somewhere in Senegal another factors come to play, and most of them are long-term. So, I would say that the average American is probably happier over the shot periods of time becuase things are happening faster here, but foreigner is better off in a long run.

Hal

Yeah, it's the same deal where Buicks and other old fogey cars are rated higher in initial satisfaction than, say, Mercedes. The Buick is a fine car no doubt, the the expectations are far higher from a Mercedes buyer.

Otherwise, it is completely irrational.

Cliff

I don't understand why they link "health care system satisfication" with "happiness"?

Don't you think "happiness" encompasses something much greater than "health care system satisfaction"?

CRM

Robert, the results of the study suggest that people's happiness with their standard of living is accurately correlated with their actual income. The suggestion is therefore that happiness with standard of health-care accurately correlates with actual quality of care.

It's still possible that people, for unknown reasons, are capable of successfully judging their standard of living vs. the rest of the world but are incapable of judging their standard of health-care similarly, but I'd say the evidence here points the other direction.

MAR

I don't think it's irrational at all. And I think every happiness survey misses the boat, because they fail to control for increased expectations. As a country gets richer, its people expect more (in every sense of the word more: freedom, wealth, health). This is all the more true now that so many countries have made the leap.

Michael

Perhaps Americans unhappy with their health system are mindful of the uninsured (i.e. http://www.forbes.com/forbeslife/health/feeds/hscout/2007/08/28/hscout607734.html ) and other such unfortunates. Even if Alice gets perfectly good healthcare service, it's only human to pity Bob, who runs up huge debts getting cancer while uninsured. Citizens in countries with nationalised health services don't have those particular worries about 'the system'.

Also with nationalised healthcare there are no worries about insurance denying claims and suchlike.

In other words, people could be happier about 'the system' without having a better personal experience.

Adam

Well if that's the case, let's replace the health care system with a tribal witchdoctor and all be happier for it.

Mario

Dear Melissa,

If there is a relationship between wealth and happiness, how the Americans are raking low? What about Ecuadorians, New Guineans, Bolivians?

Daniel Goleman (author of Emotional Intelligence) talk about the work of Nobel
prizewinning economist, Daniel Kahneman, and the “Hedonic Treadmill” to explain the relationship of wealth and hapiness:

“It turns out that having more wealth does not increase your happiness” explains
Goleman. “Going from starving poverty to just having enough is the biggest bump in
happiness from increased affluence. And that means that you don't need that lavish a
standard of living to be happy. And happiness itself lets you get off the treadmill of ever-
rising expectations. In EQ, one of the qualities that can be cultivated in the emotional
self-management domain is how to manage your emotions and become more happy.”

Just a thought.

Mario Ruiz
@ http://www.oursheet.com

Read more...

Alex

Seems pretty obvious to those of us who live travel frequently to europe. Life in the US is increasingly miserable because people are working longer hours and sustaining increased debt just to stay on par with their peers. And they are eating and polluting too much because there seems no national language other than "more". Doesn't make for either health or happiness, it would seem to me.

JD

I am suspicious any time a study asks "the exact same question" to people of different cultures, nations, and languages. There are a great deal of issues related to translation of the questions, how one questions another, how the answerer expects the answers might affect his future, etc.

Secondly, SO what?

Bogdan

The easiest way to answer this is to look at the amount of mental health clinics operating in US in comparison with different countries. I can bet that the amount thrice as big in US. The issue you've raised is not that complicated at all. People are stressing out a lot here.

Dr. Troy Camplin

Anyone who has read his Epicurus knows that money does not make you happy -- but neither does poverty. One does have to have a certain amount to make you happy, but that eventually flattens out. I'm guessing it's just enough so you no longer have to worry about money -- then it is time to work on other things that will make you happy. My wife and I are not quite there with the money yet, but still, we both manage to make each other quite happy. Baby is a factor too.

Vern

I think that the media and politics strongly affect our perceptions. We are continually being told that our health system is poor and even with evidence to the contrary, i.e. foreigners come to our country for health care, our perceptions are lowered. In many 3rd world countries, they get the health care that they expect and do not have a media to warp expectations. As a result, they are "happy" with a sub par health system.

ibm_2100

Happiness is subjective and not quantifiable so any attempt to quantify it is somewhat misleading.

brandy danu

I am an uninsured American. I live in Istanbul. I broke my arm in a fall earlier this year. Luckily for me it was a simple fracture. I went to what I later found out was the most expensive hospital in Istanbul, but I didn't know that at the time and it was in my neighborhood.

I went to the emergency room, saw the intake doctor. The osteopath was in that day (tho it was the weekend), and saw me, ordered an xray, then set my arm. I had 2 follow up visits over 6 weeks-they were included. The bill for everything at the privately operated German Hospital was 500US.

Am happier with the medical care I recieved in Turkey than what I would have received in America?Absolutely. I would have spent years paying off the medical bill for a simple fracture if I was at any hospital in America.

brandy danu

Zoe

Perhaps we'd receive better medical care, pay lower prices and be happier with the services we received if doctors didn't have to worry so much about being sued. The price of insurance is driving many people out of medical practice; NY has one of the highest premiums in the country and many doctors are leaving because of it: the state's insurance department just hiked up their rates by 14%.

Sean Phelan

It appears to me that Americans are acting as entirely rational consumers in being dissatisfied with their health and health care: the US is #1 worldwide in spending per capita but only #38 worldwide in terms of life expectancy.
See McKinsey for expenditure http://www.mckinsey.com/mgi/rp/healthcare/accounting_cost_healthcare.asp
and Wikipedia for life expectancy: http://en.wikipedia.org/wiki/List_of_countries_by_life_expectancy

ptelg

I somewhat agree with Vern, we're constantly told our health care system is the most expensive and of lower quality than other countries with similar incomes. That it's not free, and it should be, so cutting a check every time I see a doctor ticks me off on some level. "Shouldn't this be free? Provided for by the government?" But for me, I remember, "Oh yeah, I'd have to pay a higher tax rate under a rational tax system."

Robert Hammer

You quote the finding: "...the United States, where only 52% of the population express themselves as satisfied with the healthcare and medical system..."

I find this reference ambiguous. I am fully satisfied with my personal health care, but not at all satisfied with the healthcare and medical system that leaves many millions of people without access to adequate medical services.