Do you know what the world’s happiest country is? (Spoiler alert: it’s somewhere in the Nordics.) Each year, the World Happiness Report (WHR) gives an account of the state of happiness around the world. More often than not, its findings are not that surprising: highly developed countries with stable political systems are on top, while poor and war-torn countries are relegated to the bottom.

In this project (which I worked on between April 2023 - January 2024), I delved into the data to explore how happiness scores have evolved over time and identify the key factors that impact national happiness. Then, I used this knowledge to predict countries’ happiness scores for 2023-2024 before the WHR has even collected the data! Below, I present some of my findings but I strongly encourage you to download my free infographic so as not to miss on any of the insights.

Happiness is on a downwards trajectory

People around the world are now less happy than they were roughly two decades ago, with global happiness showing a decline of 14% in the period 2005-2022, as shown on the chart below:

The largest decline in happiness was observed in countries which have had very dire economic circumstances and/or military conflicts such as Afghanistan, Lebanon and Venezuela, while the largest improvement was seen in several African and Eastern European countries.

Happiness reflects development and governance

National happiness is largely defined by how well developed and how well governed a country is. Accounting for various economic, political, social, environmental and health-related factors, it is possible to explain up to 74% of the differences in happiness scores between countries over time.

I arrived at this conclusion by testing a series of ridge-regression models, where the best fitting model contained a total of 27 factors. Out of these, the ones with the strongest relative impact on global happiness were GDP per capita, female unemployment rate, access to electricity, health expenditure per capita and corruption. Other factors with a sizeable effect on happiness are shown below:

Future happiness can be predicted accurately

Over the past 17 years, Denmark has consistently ranked among the top 3 happiest countries, a feat it has achieved an impressive 16 times. Many of the other countries which appear on top of the list have also consistenly ranked high on happiness across time. Given these strong historical trends, I decided to explore how the state of happiness is going to look for in the next couple of years, assuming the underlying factors that determine national happiness remain unchanged.

To do so, I developed a machine learning model (random forest) to generate the predictions. The model was trained on all years except for the most recent year with available happiness score (2022) and was optimised to increase its accuracy. The input variables included in the model, which were selected based on the ridge regression analysis, did not originally have values in future time periods, so those were derived by projecting historical trends into the future. Assuming country-level historical trends remain valid in the forecasting period, the model should be able to predict national happiness scores with an accuracy of up to 96%.

According to this model, the top 10 happiest countries in 2023 should be:

1. Finland (predicted happiness score: 7.65)
2. Denmark (7.61)
3. Switzerland (7.43*)
4. Iceland (7.43)
5. Norway (7.43)
6. Sweden(7.28)
7. Netherlands (7.27)
8. Luxembourg (7.17)
9. Austria (7.16)
10. New Zealand (7.05)

Similarly, the top 10 happiest countries in 2024 should be:

1. Denmark (predicted happiness score: 7.62)
2. Finland (7.57)
3. Switzerland (7.40)
4. Iceland (7.38)
5. Norway (7.28)
6. Luxembourg (7.19)
7. Austria (7.15)
8. Netherlands (7.14)
9. Sweden (7.06)
10. Australia (7.02)

Of course, those are just projections based on the assumptions that historical trends for happiness score and its underlying factors will continue into the future. Therefore, it’ll be exciting to see how accurate these predictions prove to be once the actual rankings are released!

📊📖 Download the free infographic with all the insights here.

🔎📈 Explore the analysis on the project’s GitHub page.

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Note: the numbers in here have been rounded off to two decimals but in reality, more decimal points are available and the countries have been sorted according to the original, unrounded numbers.

Cover image source: Own production