The Investor 22 October 2011

This article was published on 22 October 2011. Some information may be out of date.

I’m drawing that conclusion from a graph put together by the Economist magazine. It shows a clear correlation between wealth and well-being in OECD countries, but with one exception — New Zealand.

All the 33 other countries — mainly in Europe or North America but also Japan, South Korea, Israel, Chile, Mexico and Australia — line up pretty neatly on the graph. Basically, the higher the “gross domestic product per person at purchasing power parity”, which means GDP adjusted for differences in the cost of living, the higher the well-being.

For example, Turkey, Mexico and Chile are low on both wealth and well-being. Meanwhile, Norway and the US are at the top for GDP and near the top for well-being. And Canada, Australia and Sweden are at the top for well-being and near the top for GDP.

But then there’s New Zealand, fourth for well-being but way down at 21st — nearly two thirds of the way down — for GDP.

How is well-being measured? The OECD has come up with a Better Life Index that measures 20 indicators about housing, jobs, education, environment, life satisfaction and so on.

Looking at where New Zealand scored really differently from the OECD average gives us some idea of how we landed up in our unique position on the graph, as follows:

• About 90 per cent of New Zealanders said they were in good health — the highest rate in the OECD. The average was 69 per cent.
• Nearly all New Zealanders — 97 per cent — believed they knew someone they could rely on in a time of need, compared with the average of 91 per cent.
• Only 0.6 per cent of our labour force had been unemployed for a year or longer, way below the average 2.7 per cent.
• In a measure of air pollution, we scored 11.9 micrograms, compared with the average 22 micrograms.
• New Zealand’s average student literacy score was 521 out of 600. That compares with the average of 493, and places this country fourth in the OECD.
• Our average home has 2.3 rooms per person, compared with the average 1.6 rooms.
• New Zealand’s gender-wage gap was the third lowest in the OECD, and half the OECD average.

This country also scored considerably above average for trust in political institutions. We are below average for smoking, but above average for adult obesity,

An interesting combination: Only 2 per cent of New Zealanders reported falling victim to assault over the previous 12 months — half the OECD average. However, 30 per cent of us feel unsafe on the street after dark, above the 26 per cent OECD average. Are we a bunch of scaredy cats?

On the other hand, we are “one of the happiest countries in the OECD.” That’s because 78 per cent of us “have more positive experiences in an average day (feelings of rest, pride in accomplishment, enjoyment etc) than negative ones (pain, worry, sadness, boredom etc.)”

But the deciding factor has got to be this: Only 0.4 per cent of our dwellings lack private access to an indoor flushing toilet, compared with an average of 2.8 per cent. No wonder we’re content!

In the Economist’s graph, it used the Better Life Index that equally weights all 20 indicators. But if you think that, say, environmental or health issues should have more weight, you can see how that would affect the country rankings on a fascinating website, www.oecdbetterlifeindex.org. It’s beautifully designed and fun to use.

Mary Holm is a freelance journalist, a director of Financial Services Complaints Ltd (FSCL), a seminar presenter and a bestselling author on personal finance. From 2011 to 2019 she was a founding director of the Financial Markets Authority. Her opinions are personal, and do not reflect the position of any organisation in which she holds office. Mary’s advice is of a general nature, and she is not responsible for any loss that any reader may suffer from following it.