International convergence in population happiness: evidence from recent data

ABSTRACT

In the immense literature on convergence of income and many other variables, this is the first study to consider cross-country convergence in population happiness from large international samples based on data from World Happiness Report (WHR). Three main points stand out. First, WHR data yield significant evidence that is supportive of unconditional beta-convergence in happiness across countries. Second, the evidence is also consistent with sigma-convergence in terms of coefficient of variation. Third, the implied speed of beta-convergence is close to the ‘iron law’ of about 2% per year. Information from World Database of Happiness, which is for earlier years and covers a shorter period, also indicates sigma-convergence in terms of both standard deviation of logarithms and coefficient of variation. It indicates beta-convergence too, but at a slower pace. These findings seem important and reassuring in the context of the frequent worries about lack of income convergence in broad groups of developed and developing countries and the implied possible increase in inequality across countries.

KEYWORDS:

• Happiness
• beta-convergence
• sigma-convergence
• world happiness report

JEL CLASSIFICATION:

• D3
• I3
• O47

Acknowledgments

Perceptive comments from two anonymous reviewers are gratefully acknowledged. The usual disclaimer applies.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

¹ Ram (2017) used WHR data to study a different topic about the Kuznets-type relation between level of happiness and its inequality.

² The Report explains in more detail how the happiness measure (ladder) is derived.

³ The annual speed of convergence is given by – ln(1+b)/t, where b is the convergence parameter and t is the period (in years) covered by the sample.

⁴ A recent update in World Database of Happiness shows cross-country convergence in happiness more clearly. The beta-convergence parameter is negative with high statistical significance, and both SDLOG and CV are marked by substantial declines. Additional details are available from the author.

⁵ Some caution seems appropriate in interpreting the estimates due to the happiness measure being bounded. However, the very considerable variability in the presence and the magnitude of convergence indicated by the tables suggests that the character of the happiness variable might have had only a minor impact on the predominant evidence.

⁶ The 28 countries are Benin, Botswana, Burkina Faso, Burundi, Cameroon, Central Africa, Chad, Congo-Republic, Ghana, Kenya, Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Namibia, Niger, Nigeria, Rwanda, Senegal, Sierra Leone, South Africa, Tanzania, Togo, Uganda, Zambia, and Zimbabwe. Additional details are available from the author.

⁷ This is based on UNAIDS (2019).