Francesca Levy

Francesca Levy, None

7/14/2010 @ 5:00PM

The World's Happiest Countries

In the wake of their World Cup loss, residents of the Netherlands may be feeling depressed. But there’s reason to believe they won’t be done in by the agony of defeat: According to a recent poll, the country is one of the happiest in the world.

Championship-winning Spain, on the other hand, was swept with euphoria and national pride, but that may have been an unfamiliar feeling. The country ranks No. 17 of 21 European countries in terms of happiness.

The fact is good times probably have more to do with the size of your wallet than the size of your trophy shelf. The five happiest countries in the world–Denmark, Finland, Norway, Sweden and the Netherlands–are all clustered in the same region, and all enjoy high levels of prosperity.

In Depth: The World’s Happiest Countries

Video: Happy In Bhutan

“The Scandinavian countries do really well,” says Jim Harter, a chief scientist at Gallup, which developed the poll. “One theory why is that they have their basic needs taken care of to a higher degree than other countries. When we look at all the data, those basic needs explain the relationship between income and well-being.”

Behind the Numbers


First they asked subjects to reflect on their overall satisfaction with their lives, and ranked their answers using a “life evaluation” score between 1 and 10. Then they asked questions about how each subject had felt the previous day. Those answers allowed researchers to score their “daily experiences”–things like whether they felt well-rested, respected, free of pain and intellectually engaged.

Subjects that reported high scores were considered “thriving.” The percentage of thriving individuals in each country determined our rankings. For a complete list of countries surveyed, including the percentages thriving and their daily happiness scores, click here.

Money Matters

The Gallup researchers found evidence of what many have long suspected: money does buy happiness–at least a certain kind of it. In a related report, they studied the reasons why countries with high gross domestic products won out for well-being, and found an association between life satisfaction and income.

“Money is an object that many or most people desire, and pursue during the majority of their waking hours,” researchers wrote in the report. “It would be surprising if success at this pursuit had no influence whatsoever when people were asked to evaluate their lives.”

Indeed, Denmark, the world’s happiest country, had a per-capita GDP of $36,000 in 2009, according to the Central Intelligence Agency. That’s higher than 196 of the 227 countries for which the CIA collects statistics.

But there’s more to happiness than riches. The Gallup study showed that while income undoubtedly influenced happiness, it did so for a particular kind of well-being–the kind one feels when reflecting on his or her own successes and prospects for the future. Day-to-day happiness is more likely to be associated with how well one’s psychological and social needs are being met, and that’s harder to achieve with a paycheck.

Take Costa Rica. The sixth-happiest country in the world, and the happiest country in the Americas, it beat out richer countries like the United States. That’s because social networks in Costa Rica are tight, allowing individuals to feel happy with their lot, regardless of financial success.

“Costa Rica ranks really high on social and psychological prosperity,” says Harter. “It’s probably things systemic to the society that make people over time develop better relationships, and put more value on relationships. Daily positive feelings rank really high there.”

Inhabitants of some rich countries are bound to feel happier. But happiness is elusive to define, and money isn’t the only thing that influences it. Harter explains that the more abstract sense of happiness to which wealth contributes has a different effect on one’s life than daily happiness.

“Each of us is two different people. We evaluate our lives periodically; we sit back and reflect and summarize things that have gone on in our lives to date,” Harter says. “Another side is how you experience things daily. Daily experience affects your stress and your psychology. How you evaluate your life affects your decisions. It’s important to think about how you can leverage that well-being.”

In Depth: The World’s Happiest Countries

Comments are turned off for this post.