What's the True Cost of Happiness?
Everything has its price, especially happiness. Numerous studies have shown that poor and low-income people are more likely to be depressed, more stressed, and generally have a worse emotional well-being than those who make a comfortable living.
How much it costs to be happy depends on where you live. And it seems to be going up. Over a decade ago, an often-cited Princeton study said that $75,000 was the magic salary number that could "buy" happiness in the United States. Now that magic number is over $100,000.
So where does the price of happiness cost the least? And where does it cost the most to be happy? These are the 10 countries with the highest cost of happiness and the 10 countries with the lowest cost of happiness.
10. Highest Price of Happiness — United States
Median annual salary: $68,703
Price of happiness: $105,000
Note: The price of happiness comes from this Expensivity study. Expensivity converted the "happiness premium" for every country in the world by calculating purchasing power ratios and cost of living for nearly every country in the world and key cities. Salary data comes from a variety of sources. When median salary was unavailable, other data was used when possible.
Bottom Line: United States
Cost of happiness in the United States is pretty high overall. Those making the median salary of around $68,700 would have a very hard time living in some of America's most expensive cities, like New York City, which requires a price of happiness of about $139,000, Expensivity found.
In fact, you'd have a rough time finding a major city in America where $68,000 or $69,000 made living easy. The money-building site found that Wichita, Kansas, the 84th-most expensive city to live in the world, had a price of happiness of about $85,000.
9. Highest Price of Happiness — Iceland
Median annual salary: $47,000
Price of happiness: $107,351
Bottom Line: Iceland
Iceland is one of the most expensive places to live in the entire world. This is due to a variety of factors, not the least of which is its geography. Iceland has a harsh climate, causing about 40 percent of its food and beverages to be imported into the country.
Imported food, of course, costs more than regular nationally produced food, which drives up the cost of living. Not to mention a 24 percent VAT rate. Think of VAT, or value added tax, like sales tax.
On the bright side, most Icelandic workers are part of a labor union, and the minimum wage is roughly $15 an hour.
8. Highest Price of Happiness — Japan
Average annual salary: $28,227*
Price of happiness: $107,587
*Median salary figures unavailable.
Bottom Line: Japan
Japan is an interesting country when talking about the cost of happiness.
That's because they have a notoriously brutal work culture, where workers are discouraged from taking any time off and work long hours. In the 1970s, the Japanese coined the word karoshi — meaning death from overwork.
Japan is an expensive place to live, especially in urban areas. Workers need to make about $108,000 to be happy.
Bottom Line: Denmark
While there's no federally required minimum wage in Denmark, all jobs are union jobs, which drives up salaries. For example, McDonald's workers in Denmark make about $20 an hour and receive benefits.
High wages increase the cost of living, and Danes pay about 45 percent in income taxes. But the Danes are OK with that. Denmark has consistently been ranked as one of the happiest countries in the world.
6. Highest Price of Happiness — Norway
Average annual salary: $74,000
Price of happiness: $114,147
Bottom Line: Norway
Norway has a very high cost of living, but their salaries reflect that.
Like Denmark, there's no nationally mandated minimum wage. Instead, unions negotiate salaries, which leaves most workers with a working wage of around $20 an hour.
It's a livable sum, and the country has one of the lowest rates of poverty in the world.
5. Highest Price of Happiness — New Zealand
Median annual salary: $37,132
Price of happiness: $128,884
Bottom Line: New Zealand
You'll need a significant amount of money to crack the cost of happiness ceiling in New Zealand. That's because almost everything in this small country is expensive (except healthcare) — and that makes sense, given the country's remote location.
Many goods are imported, and a lack of competition means an increase in prices. Utility bills are also high. Some expats were shocked by just how expensive New Zealand ended up being.
However, many New Zealanders report a high level of happiness.
4. Highest Price of Happiness — Switzerland
Median annual salary: $53,600
Price of happiness: $128,969
Bottom Line: Switzerland
Sometimes it's not just about the amount of money you make, but how much it costs to make it. The Swiss enjoy at least four weeks of holiday time per year with a national law mandating a maximum workweek of 45-50 hours. That's quite a bit different than many other countries, like the United States.
Still, Switzerland is expensive, and one would need to make more than double the median annual salary to crack the cost of happiness.
Bern, the capital city, has the third-highest cost of happiness of all cities in the world.
3. Highest Price of Happiness — Israel
Average annual salary: $38,000
Price of happiness: $130,457
Bottom Line: Israel
Israel has both a high cost of living and the highest poverty rate in the developed world. In 2020, the poverty rate in Israel increased from 20.1 percent before the pandemic to 29.3 percent after the pandemic.
A big factor in the country's high cost of living has to do with extremely high housing prices due to a lack of supply, and the Israeli government's extremely slow process of building new homes.
2. Highest Price of Happiness — Australia
Median annual salary: $49,805
Price of happiness: $135,321
Bottom Line: Australia
Australia is an expensive place to live due to its sealocked location and the cost it takes imported goods to get there. Its produce is highly dependent on favorable weather, which can change when droughts or wildfires hit — and when a pandemic and a drought ravages the country, people can be expected to pay a lot for veggies.
Additionally, utility prices in Australia are some of the highest in the world, which can take a toll on people's pockets when heat waves roll in.
On the bright side, even minimum wage workers earn a livable wage, earning $19.49 per hour.
1. Country With the Highest Price of Happiness — Bermuda
Median annual salary: $86,394
Price of happiness: $143,933
Bottom Line: Bermuda
Bermuda consistently ranks as one of the most expensive countries to live in the entire world.
The country's GDP per capita is extremely high at $117,090, but that's not what the average person makes. Bermudians working minimum wage jobs make $12.25 an hour, and the country may have a poverty rate as high as 23 percent (Bermuda doesn't publish its poverty rates, so the real number is unknown).
Still, if you can make it in Bermuda, you can make it anywhere — and live a life in luxury. The country has incredible beaches and nightlife for those who can afford it.
10. Lowest Price of Happiness — Nicaragua
Median annual salary: $6,467
Price of happiness: $11,273
Bottom Line: Nicaragua
In 2017, a person living in Nicaragua found that you can both buy property and retire in the country for around $100,000.
In San Juan del Sur — nicknamed "party down on the beach" — a good condo might go for $145,000. In the big city of Managua, rent in a good neighborhood can go for between $400 and $700 a month, with home prices starting at $100,000.
The median annual salary is very low in this country, making Nicaragua one of the poorest nations in Central America. However, industrialization, tourism and mining have reduced Nicaragua's poverty rate from 48 percent in 2005 to 25 percent in 2016.
9. Lowest Price of Happiness — Turkey
Average annual income: $4,860
Price of happiness: $10,742
Bottom Line: Turkey
According to Numbeo, the cost of a one-bedroom apartment in the city centers is an average of 1,546 Turkish lira a month, which equates to about $195. The country certainly has its political problems, though, and a nationalist political party has its grip on the country.
Still, those who can make a bit over double the average annual income can enjoy a relatively luxurious life.
8. Lowest Price of Happiness — Ethiopia
Average annual salary: $2,662
Price of happiness: $10,681
Bottom Line: Ethiopia
While the $10,681 price of happiness seems like nothing to Americans, the average annual salary in Ethiopia is just $2,662.
However, the cost of living in the nation's capital, Addis Ababa, is significantly higher — monthly rent for a furnished 900-square-foot apartment runs about $914.
The weather is great, too, with warm and mild days year-round.
7. Lowest Price of Happiness — Sierra Leone
Median annual salary: $6,688
Price of happiness: $10,498
Bottom Line: Sierra Leone
Those who live and work in Sierra Leone typically make close to Expensivity's price of happiness.
However, about 60 percent of the population in this West African nation live below the line of poverty.
Want to see what it's like? Take a tour on YouTube.
6. Lowest Price of Happiness — Zambia
Median annual salary: $3,266
Price of happiness: $10,224
Bottom Line: Zambia
Zambia is a resource-rich African country with copper mining making up the vast majority of the country's exports. As such, Zambia's economy is tied to the price of copper.
Most of the country's approximately 17.9 million people live in the country's capital, Lusaka, or in Livingstone and the Copperbelt region. The country has a very low cost of living, and a salary of $10,224 will take you far.
Zambia is also stunningly beautiful.
5. Lowest Price of Happiness — Iran
Average annual salary: $12,750
Price of happiness: $10,134
Bottom Line: Iran
According to Expensivity, the price of happiness in Iran is about $10,000 USD, which is actually less than the average annual salary reported by Salary Explorer.
The country has a relatively low cost of living but also an alarmingly high poverty rate of 21 percent.
Iran is one of the world's oldest civilizations and has a rich history.
4. Lowest Price of Happiness — Kyrgyzstan
Median annual salary: $2,548
Price of happiness: $8,997
Bottom Line: Kyrgyzstan
Kyrgyzstan is a mountainous country in Central Asia bordering China. The country has a high poverty rate, with about 22.4 percent of its six million inhabitants living below the poverty line. The country is currently fraught with high economic and political instability.
Kyrgyzstan has a fascinating history dating back to the Mongols.
3. Lowest Price of Happiness — Angola
Median annual salary: N/A
Price of happiness: $8,921
Bottom Line: Angola
Angola is an oil-rich Central African country with a population of over 30 million, a third of which are both impoverished and illiterate. The country is still recovering from a civil war that lasted from 1975 until 2002.
About 90 percent of Angola's exports are oil, with additional major exports being coffee, lumber and diamonds. The end of the oil boom in 2017 has shrunk the country's economy, and it is still in contraction.
Before the pandemic, in 2017, Angola's capital city, Luanda, was the world's most expensive city as rated by Mercer's. Meanwhile, half of Angolans lived on less than $2 a day.
2. Lowest Price of Happiness — Argentina
Median annual salary: N/A
Price of happiness: $8,778
Bottom Line: Argentina
At the end of World War II, Argentina's peso was once as powerful as the euro and the U.S. dollar. But decades of horrible leadership, where one president after the next made the worst economic decisions possible, led to the bankrupting of the South American nation in 2001. It hasn't been able to recover.
As of October 2020, nearly half of the country's citizens were driven into poverty due to the pandemic, which severely contracted Argentina's economy.
Despite all of that gloom, Argentina is one of the most beautiful countries in South America, with a rich culture and an absolutely beautiful landscape that includes incredible vineyards.
1. Country With the Lowest Price of Happiness — Suriname
Median annual salary: N/A
Price of happiness: $6,799
Bottom Line: Suriname
Suriname is a small, tropical South American country with a diverse culture. Its economy is dependent on mining, mainly bauxite, as well as gold and oil.
Suriname has been developing its tourism sector, although it is largely unknown or overlooked by most of the world. Some 534,000 people live in Suriname, and while the official language is Dutch, it is considered to have a Caribbean culture.
Winding rivers and pristine tropical forests surround the country's major cities. It's a stunning place to see.
Related:Best and Worst Countries for Work-Life Balance