Does Money Matter? Determining the Happiness of Canadians

This report explains why people living in certain regions or cities in Canada experience higher levels of life satisfaction or happiness. We make use of micro-level data from the Canadian Community Health Survey for 2007 and 2008. After a descriptive analysis of the data on happiness in Canada, the report identifies, through an econometric analysis of both individual and certain variables in a societal context, the factors that are the most statistically and economically significant determinants of individual happiness. We find that household income is a relatively weak determinant of individual happiness. Perceived mental and physical health status as well as stress levels and sense of belonging are better predictors of happiness. We then use these estimates to account for variation in happiness at the provincial, CMA (Census Metropolitan Area), and health region level, given the characteristics of the population in these geographical units. We find that the most important reason for geographical variations in happiness in Canada is differences in the sense of belonging to local communities, which is generally higher in small CMAs, rural areas, and Atlantic Canada.