World Happiness Index Project Report

Worl Happines Inde
DSC3215 Stochastic Project

Markov Chain Analysis
Prepared By:
Ng Cai Yun (A0138673W)
Chen Chaoqun (A0139360H)
Hsieh Han En (A0142358E)
1. INTRODUCTION
1.1 Problem Description
The World Happiness Report is a landmark survey of the state of global happiness. To es mate
the happiness scores, data from the Gallup World Poll has been used where respondents in the
survey were asked to rate their experience from a scale of 0 to 10. In order to calculate the
overall happiness score, the poll factors in the following 6 variables:
1. Economic Production (GDP per capita)

GDP per capita is in terms of Purchasing Power Parity (PPP) adjusted to constant 2011
interna onal dollars, taken from the World Development Indicators (WDI) released by the World
Bank in August 2016.
2. Social Support
Na onal average of the binary responses (either 0 or 1) to the Gallup World Poll (GWP) ques on
“If you were in trouble, do you have rela ves or friends you can count on to help you whenever
you need them, or not?”
3. Life Expectancy
The me series of healthy life expectancy at birth are constructed based on data from the World
Health Organiza on (WHO) and WDI.
4. Freedom
Freedom to make life choices is the na onal average of binary responses to the GWP ques on
“Are you sa sfied or dissa sfied with your freedom to choose what you do with your life?”
5. Absence of Corruption/Trust
Percep ons of corrup on are the average of binary answers to two GWP ques ons: “Is
corrup on widespread throughout the government or not?” and “Is corrup on widespread
within businesses or not?”
6. Generosity1
Residual of regressing the na onal average of GWP responses to the ques on “Have you
donated money to a charity in the past month?” on GDP per capita.
In this project, the group wishes to structure the ques on as a Markov Chain problem and
explore the possibility of one country changing from one state to another by iden fying how
these different variables would eventually affect the happiness score of one country. To ensure
consistency in the problem, Appendix 1 shows the list of countries excluded from the study as
1 The group will be leaving out Generosity as a variable in the model as it is a regressed model based on ques ons
on GDP per capita makes it hard to verify the types of variable it should be considered under.
1
values are missing in certain years. A er skimming down, the total number of 148 countries
have been selected to conduct the study.
2. MODEL
2.1 Model Formulation
1) Verify the Markov Property for both individual variables and overall Happiness Score
through the Condi onal Independence Test;
2) Iden fy the Transi on Probability Matrix for both individual variables and overall
Happiness Score from 2015 to 2016 and from 2016 to 2017
3) Build Linear Regression Model of the World Happiness Score to determine the weights
of each factor on the final score;
1. Economic Production (GDP Per Capita)

a. Determinants of State
State(s) Range of Values
1 Below 0.4
2 0.4-0.79
3 0.8-1.19
4 1.2-1.59
5 Above 1.6
b. Condi onal Independence Test

Independence Test (GDP)
Probability (State 3 in 2015) 0.37838
Probability (State 3 in 2015, State 3 in 2016) 0.28378

Probability (State 3 in 2015, State 3 in 2016, State 3 in 2017) 0.25676
LHS i.e. P(A,B,C)/P(B) 0.73077

RHS i.e. P(A,B)/P(B) * P(C,B)/P(B) 0.74556
Error 0.01479
Legend
P(A) = Probability (State 3 in 2015)
P(B) = Probability (State 3 in 2016)
2
P(C) = Probability (State 3 in 2017)
c. Transi on Probability Matrix

2015-2016
States 1 2 3 4 5
1 0.74 0.26 0.00 0.00 0.00
2 0.00 0.68 0.32 0.00 0.00
3 0.00 0.00 0.75 0.25 0.00
4 0.00 0.00 0.00 0.91 0.09
5 0.00 0.00 0.00 0.00 1.00
2016-2017
States 1 2 3 4 5
1 0.83 0.17 0.00 0.00 0.00
2 0.00 0.89 0.11 0.00 0.00
3 0.00 0.00 0.92 0.08 0.00
4 0.00 0.00 0.00 0.96 0.04
5 0.00 0.00 0.00 0.00 1.00
Appendix 2 shows the test of condi onal independence for the remaining 4 factors, Social
Support, Life expectancy, Freedom, and Absence of Corrup on (Trust). In conclusion, we are
able to prove that all 5 selected variables contain Markov Property as they fulfill the Condi onal
Independence Test. Our group proceeded to verify whether the overall Happiness Score exhibits
any Markov Property and result is shown as below:
2. Happiness Score
1 Below 3.0
2 3.0-3.99
3 4.0-4.99
4 5.0-5.99
5 6.0-6.99
6 Above 7.0

Independence Test
3

LHS i.e. P(A,B,C)/P(B) 0.928571

Error 0.00
Legend

2015-2016
States 1 2 3 4 5 6
1 0.50 0.50 0.00 0.00 0.00 0.00
2 0.00 0.76 0.24 0.00 0.00 0.00
3 0.00 0.10 0.74 0.15 0.00 0.00
4 0.00 0.00 0.04 0.88 0.08 0.00
5 0.00 0.00 0.00 0.04 0.96 0.00
6 0.00 0.00 0.00 0.00 0.07 0.93
2016-2017
States 1 2 3 4 5 6
1 1.00 0.00 0.00 0.00 0.00 0.00
2 0.00 0.72 0.28 0.00 0.00 0.00
3 0.00 0.09 0.83 0.09 0.00 0.00
4 0.00 0.00 0.02 0.94 0.04 0.00
5 0.00 0.00 0.00 0.06 0.94 0.00
6 0.00 0.00 0.00 0.00 0.07 0.93
2.2 Formulation Justification

In order to prove for Markov Property, we needed to show the memoryless property of the
stochas c processes, in other words, that the condi onal probability distribu on of future
states of the process (condi onal on both past and present values) depends only upon the
present state. Thus, in mathema cal terms, we needed to prove
4
We calculated the value on the le hand side by
Similarly, we obtained the value on the right hand side by
We then compared the values obtained and If the two values are equivalent or have
insignificant difference (within 0.05), we are able to show the condi onal independence
behaviour, thus the memoryless property of predic on being me-homogeneous.
2.3 Rigorous Analysis

When considering all factors that has been input for the calcula on of the final score, the
regression model will be the following:
Happiness Score = 0.000158 + 1 GDP Per Capita + 0.99 Social Support + 0.99 Life Expectancy +
1 Freedom + 1 Generosity + 0.99 Trust + 0.99 Dystopia Residuals
This regression is as so because the factors have already been weighted to scale and thus have a
coefficient close to 1 in compu ng the final happiness score. Whereas, when considering the 5
selected factors (excluding Generosity and Dystopia Residuals) for the study, regression results
displayed the weights to construct the following model for the final happiness score:
Happiness Score = 1.89 + 0.805 GDP Per Capita + 1.416 Social Support + 1.034 Life
Expectancy + 1.443 Freedom + 0.854 Trust
Figure 1: 2nd Regression Model
Concentra ng on the 2nd Regression model, we observe that the highest contribu ng factor
towards higher happiness score is Freedom. With every increase in 1 point for Freedom score,
the country’s happiness score is likely to be increased by 1.443 in scoring. In the book of
Freedom and the Pursuit of Happiness, Bave a.S, Navarra.P, Maimone, D sta s cally
emphasised the importance of freedom in cul va ng one’s happiness. Further analysis in the
book further segregates freedom into 2 categories: (1) Capability, (2) Economy required in
abling one to move towards their aspira ons. Capability freedom is discussed and is definitely
one’s income, health and educa on to enable the individual to acquire the necessary
capabili es to act upon economic opportuni es to fulfill their life aspira ons. This rec fied our
claim that Freedom is a key factor in achieving higher life sa sfac on.
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3. QUALITATIVE RESULTS
3.1 Main Results
From our model formula on and rigorous analysis, we conclude that World Happiness Index can
be viewed as a Con nuous- me Markov Chain where the states of the countries changes
gradually and not suddenly from states to states. From the transi on probability matrices of the
Happiness score from 2015 to 2016 and 2016 to 2017, the claim is supported as displayed in
Table 1. For instance, Countries in State 3 for 2017 have 9% of dropping one state to State 2, 9%
of improving their ranks, and the remaining countries have 83% of staying in State 3.
2016-2017
States 1 2 3 4 5 6
1 1.00 0.00 0.00 0.00 0.00 0.00
2 0.00 0.72 0.28 0.00 0.00 0.00
3 0.00 0.09 0.83 0.09 0.00 0.00
4 0.00 0.00 0.02 0.94 0.04 0.00
5 0.00 0.00 0.00 0.06 0.94 0.00
6 0.00 0.00 0.00 0.00 0.07 0.93
Table 1: Transi on Probability Matrix of Happiness Score
Further scru niza on of the dataset revealed that the top 3 countries (Norway, Denmark, and
Iceland) ranks highly in 3 factors namely Social Support, Freedom and Generosity claiming at
most the 7th spot out of 155 countries studied (Appendix 4: Top 10% Percen le for Countries
Happiness Score). On the same note, Appendix 5 shows the number of countries cons tu ng
the bo om 10% percen le in Countries Happiness score also revealed that bo om 3 countries,
such as Central African Republic, are highly affected by Economic Produc on, Social Support and
Life Expectancy.
2017’s dataset also showed that the Top 10 countries in general scores rela vely high score in all
variables. All of these factors are interlinked and affects one another in working towards a
common goal concerning the welfare of the country and its ci zens. Further calcula on showed
that The differences between the top 10 and bo om 10 percen le of countries in Happiness
ranking displayed a large gap of 4.844 between the highest and lowest ranked country that can
be explained by all vast difference in 6 variables accounted in the scoring between these
countries.
Overall, on a holis c scale, Happiness score seems like it is not a complete measurement of the
country’s happiness as it accounts for only the country’s improvement towards economic and
social progress and did not consider other factors that might affect the happiness index of the
country’s ci zen. Research revealed that personal variables plays a vital role in enhancing one’s
happiness such as social rela onships and mental health of one.
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3.2 Managerial Insights
Khoddam, R (2015) included that Happiness is relatable to life sa sfac on, apprecia on of life,
moments of pleasure, o en do with posi ve experience of emo ons. These defini ons
displayed that it is hard to achieve an exact measurement of Happiness due to its subjec ve
nature. Nevertheless, sta s cs of various kinds can be used to indirectly measure the effects of
personal variables in Happiness such as employment levels, and the numbers of psychological
cases consulted in hospitals within a year. In summary, the GWP Polls should consider more
factors that might contribute onto the measurement for one country’s happiness scoring on top
of tangible variables.
To allow for a more in-depth analysis on specific ways to improve countries’ happiness score, it
is suggested that one can further segregate countries to their respec ve regions to analyse.
Countries in each regions differs very much in availability of natural resources, and very much
climate that might bring more certain benefits and challenges in managing a country. For
instance, ASEAN Is a good example of how countries can work together to achieve synergy and
improve their economy and provides a pla orm for countries in Southeastern Asia to deal with
different issues - such as economic, environmental and social - that are of concern to the
countries in the group.
4. PROJECT LIMITATIONS
4.1 Data Collection
World Happiness Index was developed on an annual basis through a collec on of answers from
respondents. Most variables, for instance Social Support and Freedom scoring, can be regarded
as subjec ve and might not truly reflect the realis c situa on of the country under each factor.
Furthermore, the sample size also poses as a major limita on and challenge in reflec ng the
real situa on that the country is situated in. For example, only at most 5000 interviews were
conducted for China despite the popula on of the country being 1.38 billion in numbers. The
vast small percentage of 0.00036% is greatly not very much reflec ve of the country’s overall
happiness score.
4.2 Mathematical Calculation

First, defini on of states and state spaces are according to our group’s own discre on and
hence, we acknowledge that a redefini on of the states may result in different interpreta on of
state changes. For instance, with reference to the Table 2 below, our group experimented with
the ‘Life Expectancy’ factor, by classifying the same set of data into 10 states instead of 5 states.
We observed that the transi on probability matrix exhibited more state changing events.
7
2015-2016
States 1 2 3 4 5 6 7 8 9 10
1 0.33 0.33 0.33 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2 1.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
3 0.00 0.50 0.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00
4 0.00 0.30 0.60 0.10 0.00 0.00 0.00 0.00 0.00 0.00
5 0.00 0.00 0.11 0.78 0.11 0.00 0.00 0.00 0.00 0.00
6 0.00 0.00 0.00 0.00 0.67 0.33 0.00 0.00 0.00 0.00
7 0.00 0.00 0.00 0.00 0.07 0.78 0.15 0.00 0.00 0.00
8 0.00 0.00 0.00 0.00 0.00 0.09 0.77 0.14 0.00 0.00
9 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.61 0.39 0.00
10 0.00 0.00 0.00 0.00 0.07 0.00 0.00 0.00 0.83 0.17
2016-2017
States 1 2 3 4 5 6 7 8 9 10
1 1.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2 0.00 0.89 0.11 0.00 0.00 0.00 0.00 0.00 0.00 0.00
3 0.00 0.50 0.92 0.08 0.00 0.00 0.00 0.00 0.00 0.00
4 0.00 0.30 0.00 1.00 0.00 0.00 0.00 0.00 0.00 0.00
5 0.00 0.00 0.00 0.00 1.00 0.00 0.00 0.00 0.00 0.00
6 0.00 0.00 0.00 0.00 0.04 0.85 0.11 0.00 0.00 0.00
7 0.00 0.00 0.00 0.00 0.00 0.03 0.94 0.03 0.00 0.00
8 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.00 0.00 0.00
9 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.04 0.92 0.04
10 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.00
Table 2: Transi on Probability Matrix of Life Expectancy with 10 States
Second, before our group proceeded to conduc ng Condi onal Independence Test
mathema cally, we experimented with correla on. Nonetheless, with reference to Appendix 6,
the results we have obtained showed that the factors exhibit strong posi ve correla on with R
as high as 0.988 and R2 as high as 0.976. Hence, we were unable to show sta s cal
independence and thus, we resorted to Condi onal Independence Test.
5. Conclusion
World Happiness Index is a good assessment tool in viewing the status of the country to
provide possible improvement areas as a world or region. However, within-countries
differences should be kept in mind to provide more in-depth analysis and make improvement
solu ons customised to the country.
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6. APPENDICES
Appendix 1: List of Countries excluded from the study
S/N Countries Excluded
1 Oman
2 Suriname
3 Swaziland
4 Laos
5 Djibou
6 Lesotho
7 Comoros
8 Somaliland region
9 Mozambique
10 Central African Republic
Appendix 2: Conditional Independence Factors - All Variables

2. Social Support
1 0-0.299
2 0.3-0.599
3 0.6-0.899
4 0.9-1.199
5 1.2-1.499

9
LHS i.e. P(A,B,C)/P(B) 0.01667

Error 0.01222
Legend

2015-2016
States 1 2 3 4 5
1 1.00 0.00 0.00 0.00 0.00
2 0.82 0.18 0.00 0.00 0.00
3 0.03 0.43 0.53 0.00 0.00
4 0.00 0.00 0.74 0.26 0.00
5 0.00 0.00 0.00 1.00 0.00
2016-2017
States 1 2 3 4 5
1 0.00 0.55 0.45 0.00 0.00
2 0.00 0.00 0.60 0.40 0.00
3 0.00 0.00 0.00 0.48 0.52
4 0.00 0.00 0.00 0.02 0.98
5 0.00 0.00 0.00 0.00 1.00
3. Life Expectancy
1 0-0.19
2 0.2-0.39
3 0.4-0.59
4 0.6-0.79
5 0.8-0.99
10

LHS i.e. P(A,B,C)/P(B) 0.96296

Error 0.00
Legend

2015-2016
States 1 2 3 4 5
1 0.86 0.14 0.00 0.00 0.00
2 0.40 0.60 0.00 0.00 0.00
3 0.00 0.44 0.56 0.00 0.00
4 0.00 0.00 0.42 0.58 0.00
5 0.00 0.00 0.00 0.34 0.66
2016-2017
States 1 2 3 4 5
1 0.93 0.07 0.00 0.00 0.00
2 0.00 1.00 0.00 0.00 0.00
3 0.00 0.00 0.92 0.08 0.00
4 0.00 0.00 0.02 0.98 0.00
5 0.00 0.00 0.00 0.04 0.96
11
4. Freedom
1 Below 10%
2 10-19%
3 20-29%
4 30-39%
5 40-49%
6 50-59%
7 Above 50%

Independence Test

LHS i.e. P(A,B,C)/P(B) 0.130435

Error 0.028355
Legend

2015-2016
States 1 2 3 4 5 6 7
1 0.67 0.00 0.33 0.00 0.00 0.00 0.00
2 0.44 0.56 0.00 0.00 0.00 0.00 0.00
3 0.00 0.61 0.39 0.00 0.00 0.00 0.00
4 0.00 0.04 0.44 0.44 0.07 0.00 0.00
5 0.00 0.02 0.07 0.41 0.49 0.00 0.00
6 0.00 0.00 0.00 0.04 0.67 0.30 0.00
12
7 0.00 0.00 0.00 0.00 0.00 0.96 0.04
2016-2017
States 1 2 3 4 5 6 7
1 0.83 0.00 0.17 0.00 0.00 0.00 0.00
2 0.11 0.44 0.44 0.00 0.00 0.00 0.00
3 0.00 0.00 0.52 0.43 0.04 0.00 0.00
4 0.00 0.00 0.00 0.00 0.47 0.53 0.00
5 0.00 0.00 0.00 0.00 0.80 0.20 0.00
6 0.00 0.00 0.00 0.00 0.00 0.45 0.55
7 0.00 0.00 0.00 0.00 0.00 0.00 1.00
5. Absence of Corruption/Trust
1 Below 10.0%
2 10-19.9%
3 20-29.9%
4 30-39.9%
5 40-49.9%
6 Above 50%

Independence Test

LHS i.e. P(A,B,C)/P(B) 0.333333

Error 0.013889
Legend
13

2015-2016
States 1 2 3 4 5 6
1 0.97 0.03 0.00 0.00 0.00 0.00
2 0.00 0.95 0.05 0.00 0.00 0.00
3 0.00 0.29 0.71 0.15 0.00 0.00
4 0.00 0.00 0.38 0.62 0.00 0.00
5 0.00 0.00 0.00 0.00 1.00 0.00
6 0.00 0.00 0.00 0.00 0.50 0.50
2016-2017
States 1 2 3 4 5 6
1 1.00 0.00 0.00 0.00 0.00 0.00
2 0.28 0.72 0.28 0.00 0.00 0.00
3 0.00 0.17 0.83 0.00 0.00 0.00
4 0.00 0.00 0.50 0.50 0.00 0.00
5 0.00 0.00 0.00 0.57 0.43 0.00
6 0.00 0.00 0.00 0.00 1.00 0.00
Appendix 3: Ranking of Various Factors in Calculation of Happiness Score

Country Happines Rank(GDP) Family Life Freedom Generosity Corruption
s.Rank Expectancy
Norway 1 6 7 28 2 2 11
Denmark 2 18 3 31 5 5 4
Iceland 3 19 1 15 4 4 39
Switzerland 4 7 9 6 6 6 8
Finland 5 22 6 25 7 7 7
Netherlands 6 12 36 22 17 17 16
Canada 7 20 17 14 10 10 15
New Zealand 8 27 5 20 8 8 6
Sweden 9 13 18 16 9 9 5
14
Australia 10 17 10 11 14 14 12
Israel 11 31 51 12 91 91 84
Costa Rica 12 68 39 34 21 21 65
Austria 13 16 24 21 26 26 26
United States 14 9 38 33 42 42 47
Ireland 15 10 2 24 23 23 13
Germany 16 15 21 27 27 27 18
Belgium 17 21 23 19 34 34 24
Luxembourg 18 2 25 8 15 15 10
United 19 23 13 26 41 41 20
Kingdom
Chile 20 49 65 18 101 101 86
United Arab 21 5 72 39 11 11 9
Emirates
Brazil 22 69 35 76 79 79 61
Czech 23 34 33 35 51 51 136
Republic
Argen na 24 57 30 50 48 48 114
Mexico 25 62 89 43 87 87 48
Singapore 26 3 56 1 32 32 1
Malta 27 36 16 17 16 16 40
Uruguay 28 53 40 40 22 22 32
Guatemala 29 101 77 95 36 36 89
Panama 30 50 52 45 31 31 98
15
France 31 25 46 10 62 62 34
Thailand 32 65 37 60 20 20 140
Taiwan 33 24 48 30 104 104 107
Spain 34 30 8 5 89 89 99
Qatar 35 1 69 42 12 12 3
Colombia 36 76 43 82 56 56 125
Saudi Arabia 37 11 62 83 72 72 19
Trinidad and 38 32 50 100 39 39 153

Tobago
Kuwait 39 4 75 69 47 47 27
Slovakia 40 38 12 41 118 118 145
Bahrain 41 14 60 55 35 35 22
Malaysia 42 43 64 73 92 92 104
Nicaragua 43 111 61 56 74 74 49
Ecuador 44 84 63 52 68 68 44
El Salvador 45 95 94 81 81 81 77
Poland 46 42 27 48 37 37 115
Uzbekistan 47 108 4 104 1 1 25
Italy 48 29 29 7 128 128 141
Russia 49 47 22 92 102 102 138
Belize 50 96 113 110 33 33 70
Japan 51 26 31 3 43 43 36
Lithuania 52 41 20 71 136 136 150
16
Algeria 53 72 102 74 137 137 43
Latvia 54 48 41 64 111 111 91
South Korea 55 28 108 4 127 127 108
Moldova 56 113 79 84 133 133 152
Romania 57 52 101 53 67 67 154
Bolivia 58 104 84 107 29 29 111
Turkmenistan 59 63 14 111 86 86 21
Kazakhstan 60 46 49 78 78 78 55
North Cyprus 61 35 93 13 61 61 38
Slovenia 62 37 26 32 24 24 126
Peru 63 80 86 70 71 71 124
Mauri us 64 56 90 65 49 49 129
Cyprus 65 33 105 9 105 105 130
Estonia 66 39 19 49 54 54 29
Belarus 67 60 28 66 119 119 37
Libya 68 71 55 99 65 65 74
Turkey 69 54 59 67 117 117 67
Paraguay 70 93 11 86 58 58 76
Hong Kong 71 8 73 2 50 50 14
Philippines 72 103 78 108 18 18 68
Serbia 73 77 76 58 138 138 131
Jordan 74 87 81 79 85 85 54
Hungary 75 45 57 51 143 143 137
17
Jamaica 76 94 53 62 57 57 120
Croa a 77 51 125 47 129 129 128
Kosovo 78 91 104 93 126 126 116
China 79 73 97 36 59 59 147
Pakistan 80 114 145 114 135 135 51
Indonesia 81 86 68 106 75 75 149
Venezuela 82 64 34 75 145 145 106
Montenegro 83 67 82 54 141 141 80
Morocco 84 100 140 80 90 90 81
Azerbaijan 85 61 100 94 93 93 30
Dominican 86 74 42 88 30 30 60
Republic
Greece 87 44 80 23 150 150 127
Lebanon 88 75 107 37 123 123 135
Portugal 89 40 54 29 46 46 148
Bosnia and 90 89 114 46 139 139 155

Herzegovina
Honduras 91 112 103 85 107 107 93
Macedonia 92 78 91 61 110 110 112
Somalia 93 154 143 147 13 13 17
Vietnam 94 107 67 57 25 25 82
Nigeria 95 109 87 149 94 94 143
Tajikistan 96 127 71 97 60 60 42
Bhutan 97 99 58 105 45 45 33
18
Kyrgyzstan 98 122 45 91 69 69 133
Nepal 99 130 96 101 77 77 94
Mongolia 100 81 15 90 95 95 139
South Africa 101 79 47 141 53 53 96
Tunisia 102 83 135 77 120 120 83
Pales nian 103 115 98 89 130 130 79

Territories
Egypt 104 88 121 98 124 124 59
Bulgaria 105 58 32 44 121 121 151
Sierra Leone 106 141 123 154 113 113 97
Cameroon 107 125 127 146 82 82 122
Iran 108 59 144 63 132 132 123
Albania 109 85 138 38 98 98 132
Bangladesh 110 124 142 96 55 55 52
Namibia 111 90 111 121 38 38 73
Kenya 112 126 115 125 70 70 105
Mozambique 113 148 134 148 52 52 31
Myanmar 114 142 109 115 40 40 28
Senegal 115 131 95 113 100 100 58
Zambia 116 119 120 132 66 66 88
Iraq 117 70 124 102 122 122 63
Gabon 118 55 99 118 114 114 90
Ethiopia 119 144 136 119 88 88 35
19
Sri Lanka 120 82 74 72 28 28 92
Armenia 121 97 118 68 140 140 142
India 122 106 141 109 63 63 75
Mauritania 123 118 70 129 149 149 46
Congo 124 105 137 128 80 80 87

(Brazzaville)
Georgia 125 92 150 59 115 115 23
Congo 126 152 83 140 134 134 113

(Kinshasa)
Mali 127 132 66 143 116 116 64
Ivory Coast 128 120 131 151 73 73 50
Cambodia 129 121 119 112 3 3 101
Sudan 130 117 88 127 154 154 78
Ghana 131 116 132 126 84 84 144
Ukraine 132 98 44 87 147 147 146
Uganda 133 137 106 135 76 76 117
Burkina Faso 134 143 116 136 112 112 53
Niger 135 150 122 131 103 103 45
Malawi 136 149 151 123 64 64 95
Chad 137 133 126 152 144 144 121
Zimbabwe 138 138 112 138 108 108 72
Lesotho 139 128 92 155 96 96 56
Angola 140 102 110 150 155 155 100
Afghanistan 141 135 149 142 148 148 109
20
Botswana 142 66 85 120 44 44 69
Benin 143 134 152 137 83 83 110
Madagascar 144 145 130 116 142 142 102
Hai 145 140 146 130 153 153 66
Yemen 146 123 129 124 131 131 118
South Sudan 147 136 148 144 146 146 57
Liberia 148 151 133 134 109 109 134
Guinea 149 147 139 139 106 106 62
Togo 150 146 153 133 99 99 71
Rwanda 151 139 128 122 19 19 2
Syria 152 110 154 103 151 151 41
Tanzania 153 129 117 117 97 97 103
Burundi 154 153 147 145 152 152 85
Central 155 155 155 153 125 125 119

African
Republic
Appendix 4: Top 10% Percentile for Happiness Score

Country Happiness. Rank(GDP) Family Life Freedom Generosity Corruption
Rank Expectancy
Norway 1 6 7 28 2 2 11
Denmark 2 18 3 31 5 5 4
Iceland 3 19 1 15 4 4 39
Switzerland 4 7 9 6 6 6 8
Finland 5 22 6 25 7 7 7
21
Netherlands 6 12 36 22 17 17 16
Canada 7 20 17 14 10 10 15
New 8 27 5 20 8 8 6
Zealand
Sweden 9 13 18 16 9 9 5
Australia 10 17 10 11 14 14 12
Israel 11 31 51 12 91 91 84
Costa Rica 12 68 39 34 21 21 65
Austria 13 16 24 21 26 26 26
United 14 9 38 33 42 42 47
States
Ireland 15 10 2 24 23 23 13
Germany 16 15 21 27 27 27 18
Appendix 5: Bottom 10% Percentile for Happiness Score

Country Happiness. Rank(GDP) Family Life Freedom Generosity Corruption
Rank Expectancy
Angola 140 102 110 150 155 155 100
Afghanistan 141 135 149 142 148 148 109
Botswana 142 66 85 120 44 44 69
Benin 143 134 152 137 83 83 110
Madagascar 144 145 130 116 142 142 102
Hai 145 140 146 130 153 153 66
22
Yemen 146 123 129 124 131 131 118
South 147 136 148 144 146 146 57

Sudan
Liberia 148 151 133 134 109 109 134
Guinea 149 147 139 139 106 106 62
Togo 150 146 153 133 99 99 71
Rwanda 151 139 128 122 19 19 2
Syria 152 110 154 103 151 151 41
Tanzania 153 129 117 117 97 97 103
Burundi 154 153 147 145 152 152 85
Central 155 155 155 153 125 125 119

African
Republic
Appendix 6: Correlation Test (Happiness Score between 2016 and 2017)
23
7. References
Sustainable Development Solu ons Network (2017). World Happiness Report | Kaggle.
[dataset] Available at: https://www.kaggle.com/unsdsn/world-happiness (Accessed on 11 Nov,
2017)
Bave a, S, Navarra, P, Maimone, D (2014). Freedom and the Pursuit of Happiness: An Economic
and Political Perspective. [p.176-178] Available at:
https://books.google.com.sg/books?id=t_6GBAAAQBAJ&pg=PA176&lpg=PA176&dq=freedom+
%3D+higher+happiness?&source=bl&ots=ybZzZy_Pp6&sig=weaE13m66N_Z5Vyez5nkr7ouY5s&h
l=en&sa=X&ved=0ahUKEwj2toPjkMPXAhXH2LwKHe88Bx4Q6AEIMjAB#v=onepage&q=freedom
%20%3D%20higher%20happiness%3F&f=false (Accessed on 11,Nov 2017)
Helliwell, J., Layard, R., & Sachs, J. (2017). World Happiness Report 2017, New York: Sustainable
Development Solutions Network. Available at:
http://worldhappiness.report/wp-content/uploads/sites/2/2017/03/HR17.pdf (Accessed on 11
Nov, 2017)
Khoddam, R (2015, Jun 16). What’s Your Definition of Happiness? [online] Available at:
https://www.psychologytoday.com/blog/the-addiction-connection/201506/whats-your-definiti
on-happiness (Accessed on 11 Nov, 2017)
24

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Worl Happines Inde

DSC3215 Stochastic Project

1. Economic Production (GDP per capita)

1. Economic Production (GDP Per Capita)

b. Condi onal Independence Test

Probability (State 3 in 2015, State 3 in 2016) 0.28378

LHS i.e. P(A,B,C)/P(B) 0.73077

c. Transi on Probability Matrix

b. Condi onal Independence Test

Probability (State 6 in 2015, State 6 in 2016) 0.094595

LHS i.e. P(A,B,C)/P(B) 0.928571

c. Transi on Probability Matrix

2.2 Formulation Justification

Similarly, we obtained the value on the right hand side by

2.3 Rigorous Analysis

4.2 Mathematical Calculation

10 Central African Republic

Appendix 2: Conditional Independence Factors - All Variables

b. Condi onal Independence Test

LHS i.e. P(A,B,C)/P(B) 0.01667

c. Transi on Probability Matrix

Probability (State 5 in 2015, State 5 in 2016) 0.18243

LHS i.e. P(A,B,C)/P(B) 0.96296

c. Transi on Probability Matrix

b. Condi onal Independence Test

Probability (State 3 in 2015, State 3 in 2016) 0.047297

LHS i.e. P(A,B,C)/P(B) 0.130435

c. Transi on Probability Matrix

b. Condi onal Independence Test

Probability (State 3 in 2015, State 3 in 2016) 0.033784

LHS i.e. P(A,B,C)/P(B) 0.333333

c. Transi on Probability Matrix

Appendix 3: Ranking of Various Factors in Calculation of Happiness Score

Chile 20 49 65 18 101 101 86

Taiwan 33 24 48 30 104 104 107

Trinidad and 38 32 50 100 39 39 153

Slovakia 40 38 12 41 118 118 145

Uzbekistan 47 108 4 104 1 1 25

Italy 48 29 29 7 128 128 141

Russia 49 47 22 92 102 102 138

Belize 50 96 113 110 33 33 70

Lithuania 52 41 20 71 136 136 150

Latvia 54 48 41 64 111 111 91

South Korea 55 28 108 4 127 127 108

Moldova 56 113 79 84 133 133 152

Romania 57 52 101 53 67 67 154

Bolivia 58 104 84 107 29 29 111

Cyprus 65 33 105 9 105 105 130

Belarus 67 60 28 66 119 119 37

Turkey 69 54 59 67 117 117 67

Philippines 72 103 78 108 18 18 68

Serbia 73 77 76 58 138 138 131

Hungary 75 45 57 51 143 143 137

Croa a 77 51 125 47 129 129 128

Kosovo 78 91 104 93 126 126 116

Pakistan 80 114 145 114 135 135 51

Indonesia 81 86 68 106 75 75 149

Venezuela 82 64 34 75 145 145 106

Montenegro 83 67 82 54 141 141 80

Morocco 84 100 140 80 90 90 81

Greece 87 44 80 23 150 150 127

Lebanon 88 75 107 37 123 123 135

Bosnia and 90 89 114 46 139 139 155

Honduras 91 112 103 85 107 107 93