What is the correlation between objective indexes and aggregated self-report measures of life satisfaction?

Question

The Better Life Index and other indices seek to overcome the limitations of GDP in assessing social progress. They provide a composite score with which to rank nations on a range of indicators such as safety, environment, health, employment, economic activity, and so on.

Other researchers obtain self-report measures of happiness of life satisfaction (e.g., Diener's popluar Satisfaction with Life Scale). With care these scales can be aggregated over individuals to form a group-level measurement. For example, with careful sampling, a nation level estimate can be obtained.

I'm curious about these things:

• What is the correlation between aggregated self-report measures and objective indexes of life satisfaction?
• What explanation is provided for the size of the correlation in terms of how they are similar or different in what they measure?

Answer 1

The World Values Survey seems like a good starting point for examining nation level life satisfaction and then correlating it with other indicators.

Diener (2000) summarises this research on

mean levels of life satisfaction for selected nations from the World Values Survey (World Values Study Group, 1994), conducted with representative samples of approximately 1,000 respondents per nation between 1990 and 1993. The purchasing power parity figure is the percentage of purchasing power (based on a standard "basket" of goods) that the average person in each country can buy with his or her yearly income, compared with the average purchasing power of individuals in the United States. The correlation between mean purchasing power income and mean life satisfaction was .62 across all nations in the survey. The finding that wealthier nations have higher levels of reported well-being has been replicated several times (see Diener & Suh, 1999). One reason that wealthy nations may be hap- pier is that they are more likely to fulfill basic human needs for food, shelter, and health, as well as to have better human-fights records (Diener et al., 1995).

OECD Life Index

I performed a quick analysis of data from up to 36 countries from the OECD Better Life Index Site. You can download the datafile used directly from http://www.oecdbetterlifeindex.org/. The R code, data file, and output of this draft set of analyses is available here, along with a list of the included countries.

I obtained the following correlations between other variables and self-reported life satisfaction (r is correlation; n is number of countries):

##                                               r  n
## Rooms.per.person                           0.70 30
## Personal.earnings                          0.67 34
## Employment.rate                            0.63 36
## Households.income                          0.59 32
## Water.quality                              0.59 36
## Long.term.unemployment.rate               -0.58 34
## Self.reported.health                       0.58 34
## Life.expectancy                            0.57 36
## Dwellings.with.basic.facilities            0.54 32
## Social.network                             0.50 36
## Time.devoted.to.leisure.and.personal.care  0.43 21
## Household.financial.wealth                 0.41 31
## Voter.turn.out                             0.36 36
## Educational.attainment                     0.22 35
## Students..skills                           0.21 36
## Air.pollution                             -0.18 36
## Housing.expenditure                        0.12 32
## Years.in.education                         0.12 35
## Consultation.on.rule.making                0.12 35
## Employees.working.very.long.hours         -0.09 33
## Job.security                               0.08 32
## Homicide.rate                             -0.07 36
## Assault.rate                              -0.02 36

References

• Diener, E. (2000). Subjective well-being: The science of happiness and a proposal for a national index. American psychologist, 55, 34.
• Diener, E., Diener, M., & Diener, C. (1995). Factors predicting the subjective well-being of nations. Journal of Personality and Social Psychology, 69, 851-864.
• Diener, E., & Sub, E. (1999). Societies we live in: International compar- isons. In D. Kahneman, E. Diener, & N. Schwarz (Eds.), Well-being: The foundations of hedonic psychology (pp. 434-452). New York: Russell Sage Foundation.
• World Values Study Group. (1994). World Values Survey, 1981-1994 and 1990-1993 [Computer file, ICPSR version]. Ann Arbor, MI: Institute for Social Research.