Happy returns 🙂

Finland is the happiest country in the world. Again. Bravo, Finns. Iceland and Denmark round out the top three, while Costa Rica has climbed to fourth, the highest position ever achieved by a Latin American country. Sweden and Norway make five Nordic countries in the top six, with the Netherlands, Israel, Luxembourg, and Switzerland completing the top ten in the 2026 World Happiness Report.

Around 1,000 people are surveyed in each country every year, with three years of responses averaged together to produce the rankings. The researchers also use six other factors: GDP per person, healthy life expectancy, social support, freedom to make choices, generosity, and perceptions of corruption. These variables explain much of the differences in national life evaluations observed between 2006 and 2025.

Reasons to be cheerful

Comparing 2023–2025 with the early Gallup surveys of 2006–2010, 79 of 136 countries recorded significant improvements in life evaluation, against 41 that suffered significant declines. Twenty-one countries improved by at least a full point on the ten-point scale, with many gains coming from Central and Eastern Europe. 

The UK ranked 29th, down from 23rd in 2025, and a whole six places behind our American cousins. None of the major English-speaking countries made the top 10 for the second year running. In 2013, Finland ranked seventh and Iceland ninth. Today they are first and second. Canada, meanwhile, has fallen from sixth to 25th, Austria from eighth to 19th, and Australia from tenth to 15th.

In trust we trust

Much of happiness comes down to trust. It’s a form of social capital, something that allows strangers and institutions to interact and transact without checking every single thing first. High trust societies need fewer safeguards. Contracts are easier to enforce and people are willing to place money with institutions they believe will still be there when they want it back. The OECD has linked trust not only to wellbeing and social cohesion but to economic growth and making it easier for people and businesses to transact.

Nobel Prize-winning economist Kenneth Arrow argues more or less every transaction contains an element of trust. There’s always a little uncertainty when handing over money. Financial services spend enormous amounts of time and capital trying to remove uncertainty with regulations, collateral, ratings, audits, clearing houses, custody arrangements, and reams of terms and conditions.

Money well spent

Spending money on other people is associated with greater happiness, although later studies suggest the effect is not quite as clear cut. One experiment handed people either $5 or $20 to spend that day, either on themselves or somebody else. Those who spent the money on others ended the day happier. The amount made little difference. Who you spent it on mattered more than how much you spent.

Again, researchers tracking employees receiving profit-sharing bonuses averaging about $5,000 found the size of the windfall itself did not predict subsequent happiness. The proportion spent on other people did. The WHR tracks generosity for a reason.

Time well spent

A study of more than 6,000 people across the US, Canada, Denmark, and the Netherlands found people who spent money on time-saving services reported greater life satisfaction. In a follow-up, working adults were given money to make either a time-saving purchase or a material one. Participants were happier after buying themselves time. For much of our working lives we exchange time for money. Once we have enough of it, one of its better uses may be to reverse that trade.

That can mean paying for a cleaner, childcare, a taxi instead of a long commute, or software that saves an afternoon of admin, all of which convert money into that which is most scarce of all: time.

Happy meal

The 2025 World Happiness Report found people who share meals with others report higher life satisfaction and more positive emotions. Even sharing just one meal in the previous week saw reported higher life evaluations than those who ate every meal alone. In 2023, roughly one in four Americans (26%) reported eating all their meals alone the previous day, up 53% since 2003.

The relationship between eating together and happiness was strong enough for the researchers to compare meal sharing with much more familiar predictors of wellbeing such as income and employment. Eating together doesn’t necessarily cause happiness, but happier and more socially connected people may eat together more often. No doubt there is a virtuous cycle at play here, too. 

Unhappy medium

In 85 of 136 countries, people under 25 are happier now than the same age group was in 2006-2010. The big exceptions are the US, Canada, Australia, and New Zealand, where under-25 happiness has fallen by an average 0.86 points. The report puts forward social media as one possible explanation, although it’s more nuanced than ‘Zuck = bad’. Light social media use is associated with higher wellbeing than none at all, while learning and creating content fares better than doomscrolling algorithmic feeds.

One experiment involving US college students provides insight into the effect of social media on happiness. Participants said they would need to be paid $59 to deactivate TikTok for a month and $47 to give up Instagram. But when asked what they would pay if everyone else had to stop using them too, the numbers flipped. Students were willing to pay $28 to remove TikTok for everyone and $10 for Instagram.

These are what the researchers call ‘product traps’, services people keep using because everyone else is, despite wishing for a world in which nobody was. What on the one hand may create shareholder value, may also make at least some users less happy, if not unhappy. 

Joy division

Researchers studying 1,800 sales workers at BT found a one-point increase in employee happiness was associated with a 12-13% increase in productivity. Happier workers did not work longer hours, they just made more calls and converted more of them into sales. Pay your employees a decent salary, treat them like adults, and you will probably see decent returns on that investment.

Research has found employee wellbeing is positively associated with productivity and customer loyalty, and negatively associated with staff turnover. Companies with high employee satisfaction have historically generated excess risk-adjusted stock returns.

Retail therapy

There is a way to invest in happiness: own the companies selling it. Consumers spend vast sums buying experiences and connections. The likes of travel, live music, hospitality, sport, and entertainment all sell memories rather than stuff.

Much happiness spending is unusually resilient. People may postpone buying a new sofa or television, but experiences, hobbies, and pets often sit outside discretionary consumption. When times are tough, things are cut in favour of intangible habits, and firms that attach themselves to those habits often enjoy repeat spending and pricing power.

For everything else

So, can money buy happiness? On one level, sure. It can buy security, save time, let you help other people, and offer the freedom to spend your days as you wish. But it can also buy an expensive phone on which to discover everyone else appears to be happier than you.

The World Happiness Report points back to assets that are harder to value. Trust, friends, freedom, generosity, time, a decent job, and somebody to have lunch with seem to matter enormously to how rich a life feels.

Investors spend years turning time into money, then trying to compound it. But the happiest among us know how to spend it. After all, nobody gets to the end wishing they’d eaten a few more lunches al desko.