Do Price level and Wellbeing score go together across countries?

Across 103 countries the link before adjusting for anything is r = +0.73, on a scale from -1 (opposite) to +1 (in step). A version that uses only each country's rank gives +0.70.

Does the link hold within countries over time, not just across countries?

There are not enough years of data within countries to check this over time.

Does Price level cause Wellbeing score?

This analysis cannot answer that. It shows only that the two go together. A link between two country measures, adjusted or not, does not show that either one changes the other. Country figures also say nothing about individual people.

Price level vs. Wellbeing score

Fades after adjusting for income

Across 103 countries, Price level and Wellbeing score rise and fall together at r = +0.73 (on a scale from −1 to +1, where 0 means no link). Comparing only countries with similar income (GDP per person) shrinks it to +0.41, which could easily be chance (q = 0.083, allowing for the many pairs tested, and allowing for countries in the same region being alike). So the first figure mostly shows richer countries differing from poorer ones, not a link between these two things.

Comparing countries across the middle half of price level, 0.342 to 0.738 ratio to the US, wellbeing score is better by 0.861 typical gaps at the top of that range than the bottom. Comparing only countries with similar national income, the gap is 0.487 typical gaps.

Link before adjusting (r)+0.728p = 2.8e-18 · 103 countries

After adjusting for national income+0.407p = 2.2e-5 · likely range [+0.23, +0.56]

p, allowing for regions0.013standard error 0.117 · 7 regions

Check for luck (q)0.083across 18,622 pairs

How to read these.r runs from −1 (one goes up as the other goes down) to +1 (they rise together), and 0 means no link. Adjusting for national income means comparing countries with the same GDP per person, so differences in wealth can’t explain the link. Income is used in percentage terms, since an extra $1,000 means more to a poor country than to a rich one. p is how likely a link this strong would be if there were really none. Below 0.05 means it is unlikely to be chance. Very small values are written in short form: 1.1e-32 means a decimal point followed by 31 zeros and then 11, so very close to zero. The likely range is where the true figure probably lies, and a range that crosses zero means the link could easily be chance. Countries in the same region tend to resemble each other, so the third figure allows for that, which gives a fairer p. The standard error is the typical size of the error in r. Finally, testing this many pairs means some will look strong by luck alone. A q below 0.05 means this link is unlikely to be one of those.

Price level · ratio to the US (US = 1)link with income +0.72 · high

Wellbeing score · typical gaps (standard deviations)link with income +0.80 · high

Both of these rise and fall closely with national income, so a strong link between them before adjusting was close to certain. Read the adjusted figure, not the first one.

“Link with income” is how closely each measure tracks GDP per person across countries, from −1 to +1.

Every country as a dot

best-fit line line after adjusting

Four ways to measure the link

Method	r	p	Countries
Standard (Pearson), not adjusted	+0.728	2.8e-18	103
By rank (Spearman), not adjusted	+0.702	1.5e-16	103
Standard (Pearson), adjusted for national income	+0.407	2.2e-5	103
By rank (Spearman), adjusted for national income	+0.164	0.100	103

The rank version uses only each country’s place in line, from lowest to highest, so a few extreme countries count for less. The adjusted and unadjusted versions use the same 103 countries: those that report both measures and GDP per person. So the gap between them comes from the adjustment, not from a change in which countries are counted. Drop in the size of r after adjusting: +0.321 (a minus sign means it grew).

How solid is it?

Leaving out one country at a time, r ranges from +0.376 (without ISL) to +0.495 (without ZWE). The bar above shows that range on a scale from −1 to +1, with the solid line at the full result. The single country that moves r most: ZWE (+0.088).

Within each region

Countries are not separate, unrelated cases, and neighbors share a lot. A link that holds inside each region is far more believable than one that shows up only when comparing regions.

	n	r
East Asia & Pacific	15	+0.51
Europe & Central Asia	47	+0.56
Latin America & Caribbean	13	+0.29
Middle East, North Africa, Afghanistan & Pakistan	13	+0.40

By income third

If the link shows up only in the richest third of countries, it is a feature of rich countries, not a general pattern.

	n	r
Poorest third	35	-0.30
Middle third	34	+0.23
Richest third	34	+0.66

By largest religious group

Countries grouped by a label they share, such as main religion, rather than by a number. Groups of fewer than twelve countries are not shown. These groups differ in income, region and history all at once. So a gap between them is a place to start asking questions, not an answer.

	n	r
Christians	61	+0.43
Muslims	27	+0.16

By last European coloniser

	n	r
Never a European colony	15	+0.30
Spain	12	+0.35
United Kingdom	24	+0.19

By official ideology

	n	r
Nationalist	16	-0.39
No strong official ideology	72	+0.58

By party system

	n	r
A few parties banned	12	-0.06
No parties banned	79	+0.45

Without outliers (countries far outside the middle half of countries on either measure, by more than one and a half times the width of that middle half): r = +0.495 after dropping 1 countries.

Two series, one country

Both measures over the years for one country you pick. The two charts are stacked so they share only the years along the bottom.

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Over time, within countries

Everything above compares countries with each other at one moment. This section compares each country only with itself over 0years. So a link here can’t come from anything about a country that stays the same, such as its history, geography, institutions or culture.

Not enough history inside each country to look at this over time. That needs countries measured for several years in a row, and at least one of these measures is measured too rarely.

The data

	ratio to the US (US = 1)	typical gaps (standard deviations)	Years
Switzerland CHE	1.32	1.55	2023, 2022
Iceland ISL	1.22	1.78	2023, 2022
Ireland IRL	1.13	0.894	2023, 2010
Luxembourg LUX	1.07	0.652	2023, 2010
Denmark DNK	1.05	1.89	2023, 2022
Australia AUS	1.01	1.25	2023, 2022
United States USA	1	0.943	2023, 2022
Norway NOR	0.971	1.82	2023, 2022
Finland FIN	0.968	1.87	2023, 2022
New Zealand NZL	0.957	1.46	2023, 2022
United Kingdom GBR	0.948	1.07	2023, 2022
Canada CAN	0.924	1.06	2023, 2022
Belgium BEL	0.893	0.818	2023, 2010
Netherlands NLD	0.888	1.54	2023, 2022
Sweden SWE	0.874	1.7	2023, 2022

Feenstra, Robert C., Robert Inklaar and Marcel P. Timmer (2015), "The Next Generation of the Penn World Table", American Economic Review, 105(10), 3150-3182, www.ggdc.net/pwt. Data: Penn World Table version 11.0, Groningen Growth and Development Centre, doi:10.34894/FABVLR.
ivs; whr

Sources

Price level

Price level of household consumption, compared with the US (Penn World Table)

Groningen Growth and Development Centre, University of Groningen · via DataverseNL · CC BY 4.0 · updated irregular (new versions every few years)

How expensive the things households buy are in a country, compared with the US in the same year, when money is changed at the market exchange rate. A value of 0.5 means a typical basket of goods and services costs about half what it would in the US. Richer countries tend to be more expensive. It comes from the same price comparisons used to adjust GDP for what money buys, so it shares a building block with GDP per capita (PPP). Years in which the Penn World Table flags the price comparison as unreliable are left out. No "better" direction is set.

Wellbeing score

PlaceStats · via PlaceStats · Derived work; each member keeps its own licence · updated recomputed with the panel

The average of 3 measures from 2 publishers. Each measure is first put on a common scale: 0 is the average country in an average year, and 1 is a typical gap between countries (a standard deviation). Each is turned so that higher is better. Measures are averaged within each publisher first, so a publisher with many measures does not count for more. Members: Self-reported happiness, Interpersonal trust, Life satisfaction.

How this was computed

Data used: most recent value in 2010-2025; values come from 2010–2023. To adjust for income, each measure is first predicted from GDP per person (in percentage terms, on a log scale) with a straight-line fit. Only what is left over is then compared. This is called a partial correlation. The line is drawn the standard way (ordinary least squares), which picks the line that comes closest to all the countries at once. The error margins allow for countries in the same region resembling each other, using 7 World Bank regions. The q-value corrects for testing all 18,622 pairs at once, using the Benjamini–Hochberg method. Underlying data last updated V-Dem v16; V-Party v2. How the country data works · explore Price level and Wellbeing score

This page shows that two measures go together. It does not show that Price level changes Wellbeing score, or the reverse. These figures also describe countries, not individual people. See the ecological fallacy.