The average American should count his or her financial blessings. Photo: Satya Murthy, via Flickr.
Believe it or not, social scientists have found that one of the best ways to improve your own personal happiness is by being grateful. By counting our blessings, and focusing our energy on all that we have, we nudge our awareness toward all that is good in our lives.
Perhaps its fitting, then, to point out this holiday season that -- at least financially speaking -- the average American family has a lot to be thankful for. In a day and age when we focus a lot on income disparity -- and that's a very real concern -- perhaps we lose sight of the fact that in absolute terms, we're doing pretty well.
Zooming out to consider the entire world
In America, the median household takes home $53,657 in pre-tax income every year. A multi-year study by Gallup, released in 2013, found that the median household income worldwide was $9,733. In other words, the average American household's income is over five times larger than the worldwide average.
But there are lots of different variables to help mitigate these differences. The average cost of housing in the United States, for instance, is about $15,000. But it is far less in countries where incomes are smaller.
To help make a more apples-to-apples comparison, economists have a measure called Purchasing Power Parity (PPP). Based on data gathered by, of all organizations, the CIA, here are how the 24 largest countries in the world rank in terms of PPP per capita.
Clearly, financially speaking, we have a lot to be thankful for in the United States.
Does this make us happier?
While I've always found happiness research across geographic areas to be fascinating, I've also approached it with caution. Data about "average happiness" is nice, but viewing it as the end-all and be-all is somewhat fatalistic, making it seem that those in certain countries are bound to be happy, while those in others have no choice but to be miserable.
But when you put boots on the ground, you see that there's incredible variance in levels of satisfaction within every country, state, municipality, neighborhood, and even family in the world. It's a confusing mix between external circumstances and internal outlook that I don't think we'll ever definitively tease apart.
With all that as a caveat, I went ahead a looked at how these 24 countries ranked in terms of subjective well-being (happiness), according to a Gallup survey. Here's how many citizens Gallup found were "thriving" (more on that definition in a moment):
Researchers asked about five different areas of one's life:
- Purpose: Liking what you do each day and being motivated to achieve your goals.
- Social: Having supportive relationships and love in your life.
- Financial: Managing your economic life to reduce stress and increase security.
- Community: Liking where you live, feeling safe, and having pride in your community.
- Physical: Having good health and enough energy to get things done daily.
In response to questions in each area, respondents were categorized as either "thriving," "struggling," or "suffering" for each of the five aspects. A person who was "thriving" in at least three of the five areas was considered to be "thriving" overall.
So is the income of a country really important for the level of happiness one experiences? Perhaps not: Seven of the top 10 rated countries in Gallup's poll were from Latin America, and two have PPP per-income levels below $10,000.
To get a better idea, I plotted the same 24 countries from the preceding graphs to see if a pattern showed up.
To me, the only thing I can really see is that below $10,000, there's a cap on how many citizens are thriving. After that, just about everything is fair game.
Indeed, when I ran these numbers through some analysis, income can be said to only explain about 24% of the variance in the percentage of citizens thriving.
The key takeaway
Bringing things full circle, this data reinforces what social scientists (and any individual who takes the time to observe the world around them) have been saying for years: Your income only affects your happiness up to the point where your basic needs are met.
After that, other factors -- personal relationships, community connections, a sense of purpose, physical health, and spirituality, to name a few -- are much more important. As I said at the beginning, gratitude is usually the most important factor in one's happiness. What better time than now for Americans to offer gratitude for all we have, and in the process improve our own life satisfaction?
