Who's Counting: Health, Wealth and Happiness

The New Year invites consideration of basics such as health, wealth, and happiness. A few new studies shed a little quantitative light on these perennial imponderables, some of it surprising.

World Wealth Distribution

First wealth. A recently released study says that the inequality in wealth throughout the world is extreme and growing more so. The report by the World Institute for Development Economics Research of the United Nations University paints an informative picture of the world's wealth distribution as of 2000, the last year for which figures are available. It states that the top 1% of the world's population - about 37 million adults - had net assets (note: not income) worth at least $500,000. This constituted approximately 40% of the world's assets.

In contrast, the top 50% of the world's people owned a bit less than 99% of the wealth, and this translated into a median wealth (half the world's population having more, half less) of just over $2,000. To be in the top 10% required net assets worth about $60,000.

Professor of mathematics at Temple University, John Allen Paulos is the author of best-selling books including "Innumeracy" and "A Mathematician Plays the Stock Market." His "Who's Counting?" column on ABCNews.com appears the first weekend of every month.

The richer nations led by the US have amassed an increasing share of the world's assets, with Americans, about 5% of the global population, owning about 33% of its assets. China and India are two of the few exceptions to the failure of developing nations to slowly catch up.

Within countries this asset inequality, described by so-called mathematical power laws, is generally as lopsided as it is globally, particularly in the US. Furthermore, asset inequality is even more extreme than income inequality.

Several caveats are mentioned by the study's authors, Anthony Shorrocks, James Davies, Susanna Sandström, and Edward Wolff. One is that it is extremely difficult to estimate wealth, especially in countries with bad or non-existent statistical services. A second is that the picture is not quite as unbalanced when comparisons are made using domestic purchasing power; how long does someone have to work to buy groceries or iPods? A third observation is that someone with a huge income might have a negative net worth and thus be adjudged very poor if ownership of assets is the measure being used.

There is also an interesting mathematical aspect of the study. Even though inequality is also growing in India and China, the enormous new wealth those two countries are creating is actually decreasing global inequality. This is an instance of Simpson's paradox, in which statistical measures of different groups can be reversed if the statistics from the groups are combined.

Measurement of Happiness

Moving from money to happiness, I note that another recent study, this time by a psychologist at the University of Leicester, has resulted in the purported first ever "world map of happiness." The psychologist, Adrian White, examined studies published by UNESCO, the World Health Organization, various regional groups, and even the CIA in order to create this map.

Measuring happiness is an increasingly popular, yet even more daunting task than measuring wealth. White notes, "The concept of happiness, or satisfaction with life, is currently a major area of research in economics and psychology, most closely associated with new developments in positive psychology." Nonetheless, there's a long way to go. Cultural differences, for example, might influence people's willingness to state that they're happy. This certainly would be true among groups in which modesty and self-effacement are highly valued. Also there's the obvious distinction between an acute immediate feeling of happiness and a more general feeling of contentment.

These and other provisos aside, White's meta-analysis of the many studies he considered shows that three factors were most crucial in predicting how happy people would claim to be: health, then wealth and access to education.

He concludes, "There is a belief that capitalism leads to unhappy people. However, when people are asked if they are happy with their lives, people in countries with good healthcare, a higher GDP per capita, and access to education were much more likely to report being happy."

For what it's worth, the ranking of the 15 happiest nations in the World is: 1-Denmark; 2-Switzerland; 3-Austria; 4-Iceland; 5-The Bahamas; 6-Finland; 7-Sweden; 8-Bhutan; 9-Brunei; 10-Canada; 11-Ireland; 12-Luxembourg; 13-Costa Rica; 14-Malta; 15-The Netherlands

The US was 23rd, the UK 41st, Russia 167th, and the three least happy countries were: 176-Democratic Republic of the Congo; 177-Zimbabwe; 178-Burundi.

A Counterintuitive Study

Although the above studies have interesting details, their general thrust is not especially astonishing. More counterintuitive is a study by Stanford School of Medicine researchers published last month in the American Journal of Public Health. Succinctly put, its conclusion is that poor people who live in rich neighborhoods die at significantly higher rates than do poor people who don't.

The researchers, led by Professor Marilyn Winkleby of the Stanford Prevention Research Center, were themselves surprised by their results. "We tend to assume that people living in a high socioeconomic status neighborhood are well off," but "every way we looked at the data, we found the same result." The data included 8,200 men and women living in 82 neighborhoods in Monterey, Modesto, Salinas and San Luis Obispo, California.

The effect was particularly pronounced among women. The death rate was 19 per 1000 women of low socioeconomic status living in rich neighborhoods over the 17 years of the study compared with 11 per 1000 such women from poor neighborhoods.

One possible explanation offered by Winkleby is economic. The cost of living in rich neighborhoods might have left poor people with little money to spend on good food and health care. Or maybe services offered in poor neighborhoods were lacking in rich ones.

Another way to account for the results is psychological. As Winkleby noted, "You look out every day and you're at the bottom of the social ladder." Such status issues may induce or exacerbate stress-related conditions.

An awareness of the latter possibility is one reason some people opt to retire to poorer communities or countries. A small American pension in Mexico or Thailand, for example, might afford one high status and allow one to live very well, whereas the same money in New York might pay for a studio apartment and a Broadway play every six years.

The bottom line is that measuring health, wealth, and happiness is very tricky, but getting even a rough quantitative handle on these complicated, qualitative, and imprecise notions is nevertheless important.

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