is Ireland.* Really. <\/p>\n
And how do we know this startling little fact? Well it turns out there is a long literature of attempts to rank quality of like across locales and countries. Informally, we all do this every time we are faced with a move. More formal attempts involve taking statistics like gdp, political freedom, community, etc. and then throwing them all into a pot and coming up with an index. The final result is approximately as ludicrous as it sounds, since it is rather difficult to know how much of a political freedom index one is willing to give up for an extra $1,000. This is the weighting problem. We can think of an index as taking the listed statistics and multiplying each member of the list by some “weight”. But how in the world do we know the right weights? If we put too much weight on GDP, for example, we might be under the impression that richer means happier and the rest doesn’t matter. <\/p>\n
The UN does this sort of thing with their Human Development Index, which is basically an attempt to supplement the GDP numbers with some other things like health and education. They pretty much are just pulling numbers out of the air for the weights.**<\/p>\n
I already gave away the answer, by the way; you try to use the weights that people use when they do this for themselves. In other words, my wife preferred California to Utah for a specific set of reasons, even though Utah is better in other ways. Figure out how happy different locales make different people and then use this to form weights. There are a few ways to do this. <\/p>\n
For example, if there were no immigration barriers and moving was costless (not just financially but in every respect), then you would just use immigration flows. <\/p>\n
Alas, there are huge barriers to migration. So the Economist took another route<\/a>. They used surveys asking people how happy\/satisfied they were. Then they used those surveys (held in about 70 countries) in a regression that finds the set of weights that best relate the statistics to the surveyed happiness. Doing this, they can then use those weights to compute happiness in every country for which the statistics on gdp and so forth are available. <\/p>\n