Life-satisfaction correlates very well with more well established measures of societal progress

In a previous post about life-satisfaction I mentioned that the five most satisfied countries in Europe according to the life-satisfaction measure from the 2012 European Social Survey were also the top five in the 2013 Legatum Prosperity Index, although the five countries were in a different order. I thought that consistency was fairly remarkable considering that the ESS measure presumably took about 5 seconds to administer, whereas the Legatum Index uses 89 different variables to create its ranking. I wondered how well this very simple life-satisfaction measure would correlate with other established measures of societal progress. The results are below.

I used data from several places: (1) life-satisfaction ("How satisfied are you with life as a whole" scored 0-10) and trust in others ("Most people can be trusted or you can't be too careful" scored 0-10; I included this since higher trust correlates with more happiness) from the 2012 European Social Survey, (2) average $ GDP per capita over 2009-13 from the World Bank, (3) life expectancy as of 2013 from the World Health Organization and (4) country rankings from the Legatum Prosperity Index. I used all 27 countries in the EES but excluded Kosovo from the Legatum ranking and life expectancy analysis because I couldn't find data for it. I also excluded a country labelled "IS" because I couldn't find what country this code corresponded to in the ESS data dictionary.

The results are pretty clear: higher life satisfaction correlates with a better ranking on the Legatum Index (R = 0.84), higher GDP per capita (R = 0.81, 0.83 for ln GDP), more trust in others (R = 0.76) and higher life expectancy (R = 0.72). For such a simple measure I find those amazingly strong associations. 

The Stata code I used is below:

use "C:\File Location\ESS6e02.dta", clear

rename idno id

rename cntry c

rename stflife ls

rename ppltrst t

drop if ls > 10 | t > 10 | age == 999  | c == "IS" 

keep id c ls t

*Collapsing the variables by country will automatically convert trust and life-satisfaction scores into their country averages

collapse t ls, by(c)

*Average GDP per capita in $ over 2009-13 taken from World Bank http://data.worldbank.org/indicator/NY.GDP.PCAP.CD

gen gdppc = 4652 if c == "AL"

replace gdppc = 45387 if c == "BE"

replace gdppc = 7296 if c == "BG"

replace gdppc = 80477 if c == "CH"

replace gdppc = 25249 if c == "CY"

replace gdppc = 18861 if c == "CZ"

replace gdppc = 45085 if c == "DE"

replace gdppc = 58894 if c == "DK"

replace gdppc = 18478 if c == "EE"

replace gdppc = 29118 if c == "ES"

replace gdppc = 47219 if c == "FI"

replace gdppc = 41421 if c == "FR"

replace gdppc = 39337 if c == "GB"

replace gdppc = 13134 if c == "HU"

replace gdppc = 47400 if c == "IE"

replace gdppc = 36151 if c == "IL"

replace gdppc = 34619 if c == "IT"

replace gdppc = 15538 if c == "LT"

replace gdppc = 47617 if c == "NL"

replace gdppc = 100819 if c == "NO"

replace gdppc = 13432 if c == "PL"

replace gdppc = 21035 if c == "PT"

replace gdppc = 14612 if c == "RU"

replace gdppc = 58269 if c == "SE"

replace gdppc = 22729 if c == "SI"

replace gdppc = 17689 if c == "SK"

replace gdppc = 3900 if c == "UA"

replace gdppc = 3816 if c == "XK"

gen lngdppc = ln(gdppc)

*Inverted Legatum Prosperity "Europe only" rankings where 1 = lowest, 27 = highest, taken from http://www.prosperity.com/

gen legatumrank = 1 if c == "AL"

replace legatumrank = 18 if c == "BE"

replace legatumrank = 4 if c == "BG"

replace legatumrank = 26 if c == "CH"

replace legatumrank = 9 if c == "CY"

replace legatumrank = 13 if c == "CZ"

replace legatumrank = 20 if c == "DE"

replace legatumrank = 24 if c == "DK"

replace legatumrank = 10 if c == "EE"

replace legatumrank = 16 if c == "ES"

replace legatumrank = 23 if c == "FI"

replace legatumrank = 17 if c == "FR"

replace legatumrank = 19 if c == "GB"

replace legatumrank = 6 if c == "HU"

replace legatumrank = 21 if c == "IE"

replace legatumrank = 7 if c == "IL"

replace legatumrank = 12 if c == "IT"

replace legatumrank = 5 if c == "LT"

replace legatumrank = 22 if c == "NL"

replace legatumrank = 27 if c == "NO"

replace legatumrank = 11 if c == "PL"

replace legatumrank = 14 if c == "PT"

replace legatumrank = 3 if c == "RU"

replace legatumrank = 25 if c == "SE"

replace legatumrank = 15 if c == "SI"

replace legatumrank = 8 if c == "SK"

replace legatumrank = 2 if c == "UA"

*Life expectancy from WHO http://en.wikipedia.org/wiki/List_of_countries_by_life_expectancy

gen lifeexp = 74 if c == "AL"

replace lifeexp = 81 if c == "BE"

replace lifeexp = 74.5 if c == "BG"

replace lifeexp = 82.8 if c == "CH"

replace lifeexp = 81.2 if c == "CY"

replace lifeexp = 78 if c == "CZ"

replace lifeexp = 81 if c == "DE"

replace lifeexp = 79.5 if c == "DK"

replace lifeexp = 76.1 if c == "EE"

replace lifeexp = 82.5 if c == "ES"

replace lifeexp = 79.6 if c == "FI"

replace lifeexp = 82.3 if c == "FR"

replace lifeexp = 81 if c == "GB"

replace lifeexp = 75 if c == "HU"

replace lifeexp = 81.4 if c == "IE"

replace lifeexp = 82.1 if c == "IL"

replace lifeexp = 83.1 if c == "IT"

replace lifeexp = 75.9 if c == "LT"

replace lifeexp = 81.5 if c == "NL"

replace lifeexp = 81.9 if c == "NO"

replace lifeexp = 77.5 if c == "PL"

replace lifeexp = 80 if c == "PT"

replace lifeexp = 70.5 if c == "RU"

replace lifeexp = 83 if c == "SE"

replace lifeexp = 80 if c == "SI"

replace lifeexp = 77 if c == "SK"

replace lifeexp = 71 if c == "UA"

pwcorr ls t lngdp legatum lifeexp, sig

scatter ls legatum, mlabel(c) || lfit ls legatum

scatter ls lngdppc, mlabel(c) || lfit ls lngdppc

scatter ls t, mlabel(c) || lfit ls t

scatter ls lifeexp, mlabel(c) || lfit ls lifeexp