Brian Easton says the 2026 World Happiness Report challenges us to think differently about economics and about our country

This is a re-post of an article originally published on pundit.co.nz. It is here with permission.

The New Zealand media reported the latest World Happiness Report with the single headline that New Zealand ranked 11th. It deserved more attention for there is much to be learned from the report and the 14 earlier ones.

The publication is based on research at the University of Oxford’s Wellbeing Research Centre. Its principal source of data is the Gallup World Poll which asks respondents to evaluate their current life using the image of a ladder, with the best possible life for them as ‘10’ and the worst possible as ‘0’. The resulting scores are called ‘life satisfaction’ or ‘happiness’. Typically, around 1000 respondents are surveyed annually for each country. There are the inevitable problems of different cultural responses but, as far as it is possible to assess, they are not important.

Countries are individually scored. The highest in 2026 was Finland at 7.8; the lowest of 96 countries was Gabon at 5.2. (Earlier surveys with more countries went as low as near 2.) New Zealand’s score was 7.0. Scores shift around a bit over time; inter-country differences are not great.

I’ve written about these happiness surveys and the challenge they present to conventional economics elsewhere. (Here and Chapter 2 of In Open Seas.) I am particularly interested in the extent to which material income is a significant contributor to well-being in affluent economies. This research raises new issues.

Australia ranked below New Zealand at 15th with a score of 6.9. There is not much in it and Australia has ranked above New Zealand in earlier surveys. For the purposes of this column it is sufficient to treat happiness as much the same in the two countries. That raises the question, why is there a net (and growing) outflow of New Zealanders to Australia, if life satisfaction in the two countries is much the same?

The reasons people migrate are more complex than the economic ‘push’ and ‘pull’ factors that were once the standard theory. I struggled with the problem of ‘Why Did They Come to New Zealand?’ in my economic history Not in Narrow Seas. The economic differences between New Zealand and Britain and the alternative destinations were not that great, especially when allowance was made for a low level of knowledge about the differences. Differences in perceived life satisfaction including opportunities must be relevant.

The media has numerous articles (of varying quality) showing that those who cross the Tasman in a westerly direction are financially better off. (Serious research comes to a similar, if more nuanced, conclusion.) But will they have greater life satisfaction? It does not seem particularly related to the material standard of living; otherwise, the Australian’s happiness should be markedly higher than New Zealander’s. (There are a host of caveats. I’ll skip them because of space limitations; they are a bit tedious. I’ll assume they don’t seriously compromise the conclusion.)

 The research finds that six variables explain about three-quarters of the variation between levels of happiness across countries: GDP per capita, healthy life expectancy, and perceptions of social support, freedom to make life choices, generosity, and freedom from corruption. New Zealand ranks above Australia for social support, freedom and low corruption; Australia above on the other three.

The six variables used here are because they can be easily measured across all countries. Others you might think relevant cannot be so easily measured – weather for instance. (The study compares inequality, with New Zealand lower than Australia.)

Those missing variables may be important in policy terms. If the government was to focus exclusively on raising per capita GDP, it might damage the other factors which contribute to happiness. For instance, we can boost GDP per capita by cutting back on healthcare for the elderly which would reduce life expectancy and the non-working, retired population.

Other missing variables the government may be compromising in its quest for economic growth include the quality of the environment and urban living densities. In doing so, life satisfaction may be depressed, despite higher material incomes. No doubt there are other factors which might add to New Zealanders’ life satisfaction and be compromised by poorly managed economic growth. We need to find out what is keeping up our happiness relative to Australia. Perhaps those caveats I omitted are important.

I will return to the issue shortly, but the 2026 report’s theme of the impact of social media on happiness deserves attention. By way of background, the 2024 report looked at happiness by age. Usually young adults (in the 15-to-24 age group) are happier than their elders. While that was true in Australasia until about eight years ago, their happiness has been declining since and they are now less happy than those older than 24. This is also true for North America, Britain and Ireland but not generally elsewhere. (The gap between the age groups has been narrowing in Western Europe but their young adults are still happier.) Intriguingly, the decline seems to be strongest in English-speaking countries.

Noting that life satisfaction is highest at low rates of social media use and lowest at higher rates of use and drawing on a wide range of evidence, the 2026 report concludes that social media use is not reasonably safe for children and adolescents. It shows there is now overwhelming evidence of severe and widespread direct harms (such as sextortion and cyberbullying), and compelling evidence of troubling indirect harms (such as depression and anxiety). The report concludes that the harms and risks to individual users are so diverse and vast in scope that they justify the view that social media is causing harm at a population level. The conclusion supports Jonathon Haidt’s The Anxious Generation (reported here); unrestricted social media use is harming our young people.

For the purposes of this column, note that those unhappy young adults are more likely to migrate. Are the two facts related? We don’t know.

There are cautions. The young are likely to go walkabout anyway. The issue may be that they don’t return. Perhaps they stay long enough to settle down and have a family, so that returning becomes too onerous (especially if their partner is a local). Why is the inflow of Australians not offsetting our outflow? Perhaps for Australians, New Zealand is hardly a stepping stone to the rest of the world. Have I come back to the conclusion of my economic history that migration is about opportunity (and excitement), not material circumstances? Perhaps life satisfaction overlooks the fact that many people thrive on dissatisfaction.

The international research, which the column has drawn on, raise tantalising and fundamental questions about the future of New Zealand worth more than just a media headline. Sadly, there are not a lot of New Zealanders pursuing such questions. Perhaps we should.

Note. Much social research in New Zealand today focuses on ethnic diversity. The Gallup Poll does not, given the difficulty of measuring ethnicity in a consistent way across many cultures. In any case, the sample sizes would be small. Additionally, social research here is not particularly quantitative; the research I report above is quantitatively challenging, as would be the responses to the questions it raises.

*Brian Easton, an independent scholar, is an economist, social statistician, public policy analyst and historian. He was the Listener economic columnist from 1978 to 2014. This is a re-post of an article originally published on pundit.co.nz. It is here with permission.