A study by the New Economics Foundation puts Costa Rica at #3 on the Happy Planet Index and Panama ranks #5.

The index is not designed to show the “happiest” country, but according to NEF ” The Happy Planet Index (HPI) is an innovative new measure that shows the ecological efficiency with which human well-being is delivered around the world. It is the first ever index to combine environmental impact with well-being to measure the environmental efficiency with which country by country, people live long and happy lives.”

The higher ranking countries in the index are able to achieving, long, happy lives for their population without over-consuming planetary resources. The HPI illustrates that countries with high consumption and higher standards of living according to traditional measures such as GDP, ” do not reliably produce high levels of well-being (life-satisfaction), and that it is possible to produce high levels of well-being without excessive consumption of the Earth’s resources.”
One of the authors, Nef’s Nic Marks, told the BBC that the aim of the index was to show that well-being did not have to be linked to high levels of consumption. “It is clear that no single nation listed in the index has got everything right, but it does reveal patterns that show how we might better achieve long and happy lives for all while living within our environmental means,” Mr Marks said.

Latin American nations dominate the top 10 places in the index, while African and Eastern European nations fill most of the bottom 10. Among the world’s largest economies, Germany is ranked 81st, Japan 95th, while the US comes in at 150th.

Richard Layard, director of the Well-Being Programme at the London School of Economics’ Centre for Economic Performance, told the BBC that the index was an interesting way to tackle the issue of modern life’s environmental impact.

“It reminds us that it is not good enough to be happy today if we are impoverishing future generations through global warming.

“Over the last 50 years, living standards in the West have improved enormously but we have become no happier,” Mr Layard told the BBC.