Merge Critters:
Idle Tycoon

Abstract 

In October of 2023, The Economist published an article that showed how productivity has grown faster in Western Europe than in the United States (found here). The purpose of this case study is to expand upon the Economist's article and explore potential correlations between a country's productivity and its happiness, CO2 emissions, freedom, and homicide rates over the last 15 years. 

Overall, most countries have had a general rise in productivity, measured in GDP or GDP PPP (purchasing power), over the last few decades. This, combined with many country’s general rise or decline in other datasets over time creates potentially enlightening correlations. It needs to be noted that correlation is not causation and just because two variables moved in a similar trajectory over time does not mean they are inherently correlated. It could be a coincidence. However, the number of countries that have strong correlations, positively or negatively, between the datasets on hand and to their GDP or purchasing power does indicate some interconnection likely through missing variables. While there were not many glaring outcomes of this study, the hope is that the findings will be useful building blocks of a future study on more causal relationships. 

Scope and Data 

In an attempt to build off of the research exhibited in the original article, the same countries will be evaluated in roughly the same time frame. Any country that does not include the full 15 years of data but is an outlier is specifically called out and any country that did not have at least 10 years of contiguous data was removed from the analysis. 

The time frame used is from 2007-2022 and the list of countries are as follows: Australia, Austria, Belgium, Canada, Croatia, Czechia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Israel, Italy, Japan, Latvia, Lithuania, Luxembourg, Netherlands, New Zealand, Norway, Poland, Portugal, Slovakia, Slovenia, South Korea, Spain, Sweden, Switzerland, United Kingdom, United States 

Note on Abbreviations and Purchasing Power 

The term "GDP PPP" is used to reference a country's GDP converted to purchasing-power parity to describe the purchasing power of working individuals. By using both GDP and GDP PPP, some different correlations arose with some countries having steady changes in their purchasing power over time while not having a consistent change in overall GDP. 

In an effort to describe productivity, the figures of GDP per capita of labor force and GDP PPP per capita of labor force are used. In general, comparing the data on productivity, happiness, CO2 emissions, freedome, and homicide rates with GDP PPP created stronger correlations with a few exceptions. Greece had the most consistent differences between GDP and GDP PPP due to having a steady decline in GDP since 2007 but having had less consistently changing purchasing power per worker.