Where Is Your Happy Place? It Might Be Slovenia

Slovenia stands out in a comparison of what people earn and what they believe they need to live happily. It is the only country in the study where average annual earnings, estimated at $42,800, exceed the $36,800 residents say they need for a good life.

The figures come from research first compiled in 2018 by psychologists at Purdue University and the University of Virginia. The researchers used earlier surveys to estimate the income associated with happiness, then adjusted the data for inflation and compared it with average earnings in each country.

The pattern favors Eastern Europe. Residents there generally earn at least 70% of the amount they believe they need to be happy, even though their satisfaction threshold is comparatively lower. Luxembourg is among the few Western countries to reach a similar level. New Zealand, the United Kingdom and Australia appear most financially stretched, with earnings covering roughly one-third of the amount people associate with happiness.

The analysis presents affordability as a problem that extends beyond the United States. It points to housing in Sweden and other Western countries, where building restrictions and rent controls can make homes more expensive. It also notes that rising prosperity may lift living standards faster than incomes, leaving people feeling that their gains are insufficient.

The research describes diminishing returns from income. People tend to become happier as earnings rise from low levels, but happiness can decline after a certain point. The authors speculate that once basic needs are met, material goals and comparisons with others become more important. Even Denmark, widely regarded as one of the world’s happiest countries in a separate survey, has average earnings covering only 66.8% of what residents say they need to feel happy.