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Why India’s ranking on the World Happiness Index rankles

by Index Investing News
March 29, 2023
in Opinion
Reading Time: 6 mins read
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Most governments use variations on GDP, or per-capita GDP, to estimate people’s collective satisfaction. But this is an imperfect tool (as is GNH, to be honest) since income is unevenly distributed and there are obviously other factors that contribute to happiness.

The WHR uses surveys. These are voluntary, designed to gauge the feelings of respondents and how benevolent they think their society is. The rankings are based on a three-year average of these self-evaluations. Around 100,000 people from around 130-odd countries take the survey every year.

The WHR looks at per-capita income and says it does correlate to happiness. It also considers soft variables such as positive social connections, trust in society, freedom to make life choices, generosity, freedom from corruption, as well as quality-of-life indicators like healthy life expectancy.

Intuitively, all these would seem to have an impact on happiness but they are all “background data” correlated with answers to the key questions.

The key tool of the survey is called the Cantril Ladder. This asks recipients to “Please imagine a ladder, with steps numbered from 0 at the bottom to 10 at the top. The top of the ladder represents the best possible life for you and the bottom of the ladder represents the worst possible life for you. On which step of the ladder would you say you personally feel you stand at this time? This ladder has sub-sections.”

The survey also asks questions like “Imagine that you lost a wallet or purse that contained $200. Please indicate how likely you think it would be to have all of your money returned to you if it was found by someone who lives close by.” The more likely you think this is, the happier you’re likely to be, the survey reasons.

With the UN’s blessings, the WHR has been released every year since 2013. While the Bhutanese are part of the policy framework, the heavy lifting on design and analysis is done by independent academics (largely economists and social scientists from Canada in 2023).

The WHR is also backed up by Gallup data and released by the Sustainable Development Solutions Network, a UN non-profit. The initiative is supported by multiple organisations.

This year’s report (WHR 2023) has caused some disbelief and dismissive noises from Indian policymakers, and outright derision on social media. While Finland and Denmark retain their number 1 and number 2 positions – and nobody is arguing about that – India sits at 126 out of 137 nations, which is not much of an improvement from 136 out of 146 in 2022.

India’s sub-continental neighbours – Nepal (78) Bangladesh (118), Sri Lanka (112) and Pakistan (108) – are all ranked higher. Pakistan’s political temperature heated up only after the survey was completed but Sri Lanka has also been through a combination of bankruptcy and near civil war.

Even more intriguing is that both Russia and Ukraine saw their ranking improve from 2022. Ukraine rose from 98 to 92 while Russia rose from 80 to 70. That’s despite being embroiled in a full-scale war that’s caused devastating loss of life and wholesale destruction in Ukraine, and prompted young Russians to flee the country to avoid conscription.

Such counter-intuitive rankings have called into question the survey’s methodology. WHR 2023 includes an extensive explanation of why Ukraine’s and Russia’s rankings improved and delves into data from 2012 and 2022 to create a robust baseline.

One possible reason it offers is this: “Approval of the government rose sharply in 2022 in both Ukraine and Russia, but by much more in Ukraine than in Russia”. Another reason: “During 2022, benevolence grew sharply in Ukraine… Despite the magnitude of suffering and damage in Ukraine, life evaluations in September 2022 remained higher, supported by a much stronger sense of common purpose, benevolence and trust in Ukrainian leadership.”

The report also says, “Negative emotions were more frequent in Ukraine. The largest increases were for worry, which was experienced by more than 50% of Ukrainians in 2022.”

Since the survey is voluntary, it could have a selection bias – perhaps only the very happy or the very unhappy take it (that divergence is examined). It could also be fairly easily gamed by governments “encouraging” citizens to take it, though the three-year averaging will smooth out some of that.

However, the next round could feature a very large cohort of happy Indians or ecstatic Chinese, for example. The survey asserts, “Increased benevolence and trust in government are frequently found in times of crisis, especially if the population is united in a common cause.” From that perspective, It will be interesting to see what WHR24 throws up for nations experiencing war or turmoil such as Israel, Ukraine and Pakistan – not to mention India.

And so, while the survey may have triggered an instant drop in Indians’ happiness levels, it’s very likely that the participation of self-selecting happy citizens in the next edition would boost India’s ranking impressively.

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