No 6 CORRELATION OF OBJECTIVE AND SUBJECTIVE TERRITORIAL DEVELOPMENT INDICES IN THE WORLD

A variety of measurement instruments is used to estimate the territorial development in the world, for instance, indicators, indices, etc. These measurement tools are applied measuring certain regions of a country and assessing the development of a territory as well as comparing territories with each other or in relation to the previous years. In Latvia, certain methodology for calculating the level of territorial development has existed for about 15 years. Parallel to the official methodology, scientists and researchers of Latvia offer to use alternative methodology and indices for measuring territorial development. Having analysed various theoretical approaches to a relatively new direction of the economic science within the framework of Economics of Development, the authors offer their own perception of the conceptual nature of the territorial development that could be used as a methodological basis for measuring territorial state of development: the main indicator of any territorial development is related to People, their material well-being, and health, level of education, spirituality, and overall satisfaction with life. In other words, a developed territory is the one, where the number of people increased, and these people are wealthy, healthy, educated, spiritually developed, and satisfied with their lives, but a relatively more developed territory is the one, where these indicators are higher. In recent years, researches in the field of territorial development resumed the idea that money as well as economic growth is insufficient to evaluate the development, particularly in developing countries: the world’s nations became increasingly wealthy; therefore, prosperity is not a pure index to evaluate country’s development. As a result, various indices and indicators, focused directly on the determination of subjective well-being level of society and people, are emerging. Therefore, many countries worldwide conclude that there is a need for assessing subjective well-being at a national level that, in its turn, could serve as a goal for reviewing the national public policy. In order to understand the interaction between territorial development indices, the authors of this article on the basis of the newly-created methodological model for measuring territorial development, analyse their correlation, considering world’s countries as an object and basing on the available official statistical information and qualitative research data. The objective of the research is to empirically analyse the way objective and subjective territorial development indices are interconnected as well as to determine whether people’s satisfaction with life and spirituality depend on people’s material welfare. The analysis led to the conclusion that people’s satisfaction with life correlates with GDP per capita in the country, although people’s spirituality (in this research happiness) can poorly correlate with material welfare of society.


Introduction
"People are the real wealth of a nation."With these words, in 1990, "the Human Development Report" launched its energetic campaigns towards the new approaches to support the development.The idea that the basic objective of development is to create an enabling environment for people, which allows living long, healthy and creative lives, today may seem obvious.However, it was not always like that.The main objective of the report, over the last 20 years, has been to emphasize the fact that development itself is directly intended for people (Klugman J. 2011).
Any territory is a land with its inhabitants with all life diversity, it is also the land's natural resources, infrastructure, culture, history, relationships with other territories (inhabitants) and many other aspects that turn this territory into what it is, its identity is formed.The change of all these aspects at a time forms the content, which must be considered in order to understand the development.Therefore, researchers seek to create measurement methods of development that would combine many (or at least some of the most important) development aspects in a single numerical index.In these measurements, the most important issues are: to what extend people are ensured equality in the distribution of material wealth, whether equal opportunities are created in relation to employment, education, livelihood (food provision, shelter), regarding healthcare, availability of leisure time and the use of it, security, as well as political and cultural life.The most marked material factors in this group, such as material wealth, food, shelter, are often connected with the conceptstandard of living, but less material factors (health, leisure, cultural life) with the concept -quality of life.
The authors of the research, basing on the theoretical assumption that "region's development = people's lifesustenance, self-esteem and freedom", have developed a methodological model for measuring territorial development aimed at evaluation of territorial development.In this research, the authors will analyse the correlation of the model elements of the indicator values concerning the world countries, taking into consideration the available official statistical data and quantitative research data.
The aim of the research is to analyse the correlation peculiarities of index indicators of countries in the world in regard to the authors' newly-created methodological model for measuring territorial development, taking into consideration the available official statistical data and quantitative research data.
Research tasks: 1) To provide the theoretical substantiation of the newlycreated methodological model for measuring territorial development; 2) To conduct correlation analysis of index indicators of this model regarding countries; 3) To analyse the findings and formulate conclusions.Research object -93 countries.Research subject -territorial development indices of 93 world countries.
Research hypothesis -such subjective elements of the methodological model of territorial development as people's satisfaction with life and their spirituality depend greatly on people's material well-being.
Research methods: monographic method, logical analysis and synthesis method, deductive method, correlation method.

Theoretical substantiation of the newly-created methodological model for measuring territorial development
The authors of this research repose on the theoretical elaborations of "economics of development," which clarify the concept of economics of development, as well as aims and tasks of the branch of this economic science.
Economics of development -the study of how economies are transformed from stagnation to growth and from lowincome to high-income status, and overcome problems of absolute poverty (Todaro M.P., Smith S.C. 2011).Economics of development seeks to understand and explain why some countries (territories) are poor and others rich, and how to reduce poverty in poor countries (territories) to give everyone on the planet a minimum standard of life and freedom from hunger and fear of the future (Thirlwall A.P. 2011).
The study of economics of development as a separate subject in economics is a relatively new phenomenon.Academic interest in the mechanics of growth and development is a renewed interest rather an entirely new preoccupation of economists.The progress and material well-being of people and nations have traditionally been at the centre of economic writing and enquiry.It constituted one of the major areas of interest of classical economists.Smith A. (1776), Ricardo D. (1817), Malthus T. (1798), Mill J.S. ( 1859) -all dealt at some length with the causes and consequences of economic advance.The list of modern-day economists who have turned their fertile minds to the study of economic development is the following: Krugman P. (1991), Stiglitz J. (1994), Rostow W. (1960), Robinson J. (1996), Johnson H. (1966), Sen A. (1983).
According to the economics of development, territorial development is seen as a whole process having a particular result: the process itself is territorial capital growth, but the result achieved within the process is territorial state of development (see fig. 1).Capital of the territory is a determinant, which is actively studied by scientists and researchers in Europe as well as in Latvia it used to determine theoretical methodological base of territorial development -Giffinger R. ( 2008), Camagni R. (2008, 2009, 2011), Capello R. (2008, 2009), Valtenbergs V. (2011).Territorial capital consists of seven elements -financial capital, technical infrastructure (buildings, structures, etc.), social capital, human capital, nature capital, cultural, and political capital.
The authors of the research, basing on the theoretical assumption that "region's development = people's lifesustenance, self-esteem and freedom", have developed a methodological model for measuring territorial development aimed at evaluation of territorial development.In this research, the authors will analyse the correlation of the model elements of the indicator values concerning the world countries, taking into consideration the available official statistical data and quantitative research data.
The aim of the research is to analyse the correlation peculiarities of index indicators of countries in the world in regard to the authors' newly-created methodological model for measuring territorial development, taking into consideration the available official statistical data and quantitative research data.Research hypothesis -such subjective elements of the methodological model of territorial development as people's satisfaction with life and their spirituality depend greatly on people's material well-being.
Research methods: monographic method, logical analysis and synthesis method, deductive method, correlation method.

Theoretical substantiation of the newly-created methodological model for measuring territorial development
The authors of this research repose on the theoretical elaborations of "economics of development," which clarify the concept of economics of development, as well as aims and tasks of the branch of this economic science.
Economics of development -the study of how economies are transformed from stagnation to growth and from lowincome to high-income status, and overcome problems of absolute poverty (Todaro M.P., Smith S.C. 2011).Economics of development seeks to understand and explain why some countries (territories) are poor and others rich, and how to reduce poverty in poor countries (territories) to give everyone on the planet a minimum standard of life and freedom from hunger and fear of the future (Thirlwall A.P. 2011).
The study of economics of development as a separate subject in economics is a relatively new phenomenon.Academic interest in the mechanics of growth and development is a renewed interest rather an entirely new preoccupation of economists.The progress and material well-being of people and nations have traditionally been at the centre of economic writing and enquiry.It constituted one of the major areas of interest of classical economists.Smith A. (1776), Ricardo D. (1817), Malthus T. (1798), Mill J.S. (1859) -all dealt at some length with the causes and consequences of economic advance.The list of modern-day economists who have turned their fertile minds to the study of economic development is the following: Krugman P. (1991), Stiglitz J. (1994), Rostow W. (1960), Robinson J. (1996), Johnson H. (1966), Sen A. (1983).
According to the economics of development, territorial development is seen as a whole process having a particular result: the process itself is territorial capital growth, but the result achieved within the process is territorial state of development (see fig. 1).Capital of the territory is a determinant, which is actively studied by scientists and researchers in Europe as well as in Latvia it used to determine theoretical methodological base of territorial development - Giffinger R. (2008), Camagni R. (2008, 2009, 2011), Capello R. (2008, 2009), Valtenbergs V. (2011).Territorial capital consists of seven elements -financial capital, technical infrastructure (buildings, structures, etc.), social capital, human capital, nature capital, cultural, and political capital.Analysing Figure 1, it can be concluded that state of development is hardly conceivable without growth, however growth is possible without state of development.Although the state of development is virtually impossible without growth, it is possible without increasing income per capita.To analyse the development, there should be improved standard of living and welfare, when the increase in income per capita is a sufficient condition to improve the well-being of individuals -it is an indispensable element to achieve prosperity without radical institutional innovations.(Thirlwall A.P. 2011).
The economists Goulet D. (1977) and Sen A. (1983) argue that economic development must mean much more than just a rise in the average level of per capita income of a country.A concept of development is required that embraces all of the economic and social objectives and values that countries strive for -not simply material progress, but, in particular, the selfesteem of peoples and nations, and freedom.
Economist Goulet D. (1977) this broad concept "development" expounds and substantiates using three core components, defined in terms of life-sustenance, self-esteem and freedom.
Life-sustenance is concerned with the provision of basic needs.The basic needs approach to development was initiated Analysing Figure 1, it can be concluded that state of development is hardly conceivable without growth, however growth is possible without state of development.Although the state of development is virtually impossible without growth, it is possible without increasing income per capita.To analyse the development, there should be improved standard of living and welfare, when the increase in income per capita is a sufficient condition to improve the well-being of individualsit is an indispensable element to achieve prosperity without radical institutional innovations.(Thirlwall A.P. 2011).
The economists Goulet D. (1977) and Sen A. (1983) argue that economic development must mean much more than just a rise in the average level of per capita income of a country.A concept of development is required that embraces all of the economic and social objectives and values that countries strive for -not simply material progress, but, in particular, the self-esteem of peoples and nations, and freedom.
Economist Goulet D. (1977) this broad concept "development" expounds and substantiates using three core components, defined in terms of life-sustenance, self-esteem and freedom.
Life-sustenance is concerned with the provision of basic needs.The basic needs approach to development was initiated by the World Bank in the 1970s.No country may be regarded as fully developed if it cannot provide all its people with such basic needs as housing, clothing, food and minimal education.A major objective of development must be to raise people out of primary poverty and to provide basic needs simultaneously.
Self-esteem is concerned with the feeling of self-respect and independence.No country can be regarded as fully developed if it is exploited by others and does not have the power and influence to conduct relations on equal terms.All peoples and societies seek some basic form of self-esteem, although they may call it authenticity, identity, dignity, respect, honour, or recognition.The nature and form of this self-esteem may vary from society to society and from culture to culture.
Freedom refers to that people are more able to determine their own destiny.No person is free if they cannot choose; if they are imprisoned by living on the margin of subsistence with no education and no skills.The advantage of material development is that it expands the range of human choice open to individuals and societies at large.Freedom here is to be understood in the sense of emancipation from alienating material conditions of life and from social servitude to nature, other people, misery, oppressive institutions, and dogmatic beliefs, especially that poverty is predestination.
All three of these components are interrelated.Lack of selfesteem and freedom result from low levels of life sustenance, and both lack of self-esteem and economic imprisonment become links in a circular, self-perpetuating chain of poverty by producing a sense of fatalism and acceptance of the established order -the "accommodation to poverty" as Galbraith (1980) once called it (Thirlwall A.P. 2011).Goulet's (1977) three core components of development are related to Sen's (1983) vision of development defined in terms of the expansion of entitlements and capabilities, the former giving life-sustenance and self-esteem; the latter giving freedom.Sen A. (1983) considers freedom as a precondition of development; freedom is primary instrument to reach development.Development includes the process of eliminating "unfreedoms" widening individuals' choices and opportunities.One understands "unfreedoms" as starvation and insufficient food, bad health and lack of basic needs, lack of political freedom and basic civil rights as well as economic insecurity.Sen A. (1983) defines development as expansion of person's freedom -the possibility to expand person's selffulfilment, as well as freedom of choice regarding different ways of living.
In his researches Sen A. (1983) used the "capability approach" and substantiated the idea that the process of development -it is not only the increase of material and economic well-being, but also widening of individuals' opportunities, which means greater freedom of choice to let each one choose from several options the aim and lifestyle they consider to be the best.
In the economics of development, analysing territorial development the emphasis is put not only on economic, material but also on other objective indices.Much attention is also paid to the analysis of such subjective, "intangible" indices as people's life satisfaction, happiness, people's subjective well-being, and quality of life.These indices are summarized and analysed by so called "Happiness Economics" mainly using surveys where people have to answer a set of questions about their subjective feeling of life satisfaction and happiness.
The greatest cornerstone of "happiness economics" is the question: "Does the feeling of happiness/subjective wellbeing depend on material conditions?", in other words: "Is happiness found in money?".The first one, who researched correlations between GDP of countries and subjective wellbeing of individuals, the American economist Easterlin R. (1974); in 1974 he discovered the "Easterlin paradox" according to which individuals' subjective well-being is a very relative notion: while a person is more prosperous than other members of the society, he feels happy; as soon as the surrounding people reach his material level, he does not feel so happy, e.g., people try to be not simply rich, but richer than others.Easterlin asserts "In all societies, more money for the individual typically means more individual happiness.However, raising the incomes of all does not increase the happiness of all".
Analysing Easterlin's approach to the analysis of subjective well-being the authors of the article point that Easterlin does not consider separately how individuals' life satisfaction and feeling of happiness changes depending on income, usually combining them into one term "subjective well-being".
The approach of the American scientist Inglehart R. ( 2008) and his co-researchers to the solution of regularities mentioned above is closer to the authors of the article.Inglehart's terms "people's life satisfaction" and "feeling of happiness" are defined separately considering to what extent each phenomenon is related to the individual and state wellbeing.Inglehart believes that material well-being mostly affects people's life satisfaction, not happiness because life satisfaction is more sensitive to economic conditions than happiness.Happiness is a felling which can be reached on the spot; it is directly related to the solidarity of a group of people, religiosity and national pride.However, at higher levels of economic security, the impact of free choice surpasses that of solidarity.In his researches Inglehart uses Subjective Well-being Index (SWB index): SWB = life satisfaction -2.5 x happiness to assess the obtained data.The results of the research show the more tolerant the society, the larger SWB Index -the tolerance of the society widens individual's freedom of choice, reduces the inequality of genders, thus facilitating the increase of happiness.Inglehart also points that religiosity and national pride are stronger in less developed countries explaining the fact that low-income countries have a relatively high SWB Index.
The British economist Layard R. (2005) in his book "Happiness: Lessons from a New Science" published in 2005 believe there is a certain threshold of people's wealth ≈ 20000 USD a year per capita, reaching it the feeling of happiness and total satisfaction do not depend on the income level anymore.But in countries, where in the income per capita is lower than this threshold, the situation is completely different: individuals' subjective well-being directly depends on the provision of primary living conditions.It should be added that Layard R. (2005) considers life satisfaction as a component of happiness.Layard names seven factors ("The Big Seven") having the greatest impact on happiness: 1) family relationships, 2) financial situation, 3) work, 4) community and friends, 5) health, 6) personal freedom, 7) personal values.
The American economist Deaton A. and psychologist Kahneman D. ( 2010) have a different approach to definition of people's subjective well-being.They believe that people's subjective well-being consist of two components: emotional well-being (experienced happiness) and total life satisfaction (life evaluation).Two well-being conceptions of an individual are as follows: "Experiencing self" and "Remembering self".The well-being conception "Experiencing self" means immediate experiencing and sensing happiness, but the conception "Remembering self" -means to what extent an individual is satisfied thinking about his life.
Exploring people's subjective well-being Deaton and Kahneman (2010) happiness (emotional well-being) is assessed by questions about the presence of various emotions in the experience of yesterday (e.g., enjoyment, happiness, anger, sadness, stress, worry).Satisfaction with life (life evaluation) is measured using Cantril's ladder scale, which has the respondent rate his or her current life on a ladder scale in which 0 is "the worst possible life for you" and 10 is "the best possible life for you".Answering the question "How satisfied are you with your life as a whole these days?" an individual should place himself/herself on the most appropriate step of the ladder.
As a result of this research Deaton and Kahneman (2010) discovered the following correlations: people's feeling of happiness increases when their income increase, but to a certain point of ≈ 75000 USD per year, exceeding this limit people do not feel happier.
As regards people's total satisfaction with life -after this income threshold money can still influence people's satisfaction with life, but not emotional well-being.
Perhaps 75000 USD is a threshold beyond which further increases in income no longer improve individuals' ability to do what matters most to their emotional well-being, such as spending time with people they like, avoiding pain and disease, and enjoying leisure.Besides, the more people's income exceeds the threshold of 75000 USD per year, the less simple joy of life makes them happy.But when the income level decreases, people feel less happy, they are more stressful and disappointed.It has been observed that religion has a substantial influence on improving positive affect and reducing reports of stress, but no effect on reducing sadness or worry (Kahneman and Deaton 2010).
Summing up everything mentioned above it can be concluded that development takes place when the basic needs are improved, when economic success facilitates increase of self-respect in the individuals and state, and when the improvement of the material status broadens people's rights, opportunities, freedom and increases people's subjective well-being and emotional state, e.g., when growth leads to development (see Fig. 1).

Empiric indicators of the newly-created methodological model for measuring territorial development
The authors of the research suggest substantiating the evaluation of the level of territorial growth on the newlycreated methodological model for measuring territorial development, the indicators of which are focused directly on the people's existence and determination of the level of their welfare.
This model consists of 6 key elements (see Fig. 2):
The following indicators have been chosen to be the empirical indicators of the basic elements of the newlycreated methodological model of territorial development: 1) Element "Number of population" -average increase in the number of population %, 2010/2015 ("Human Development Report 2011").2) Element "Material welfare of people" -GDP per capita, calculated at purchasing power parity (USD), which is often used instead of the market rate to compare the economic indicators of various states and currencies because then they reflect definite amount of goods or a definite level of well-being not taking into consideration the price differences ("Human Development Report 2011").3) Element "People's health" -infant mortality (the number of deaths in their first year of life per 1000 live births) and life expectancy at birth (years) ("The Global Competitiveness Report 2011/2012").4) Element "People's education" -the number of people enrolled in primary school (net) % from the total number of inhabitants and the number of people enrolled into tertiary education institutions (gross) % from the total number of inhabitants ("The Global Competitiveness Report 2011/2012").5) Element "People's spirituality" -Happiness index (Overview of the database "ASEP/JDS" for the period of 1999/2009 -World Map of Happiness).6) Element "People's satisfaction with life" -coefficient of people's satisfaction with life ("Human Development Report 2011").

Correlation analysis of the newly-created methodological model for measuring territorial development
As not all countries in the world calculate all indicators mentioned above, only 93 countries were selected for analysis, including Latvia; the authors succeeded to find all eight groups of indicators for these countries.These 93 countries were ranged according to the values of the indicators attributing each country a certain place in the range according to each indicator.After that, this information was fed into the SPSS («Statistical Package for the Social Sciences») statistical analysis software, with the help of which, the correlation strength was determined, applying the Spearman's rank correlation coefficient, which does not depend on the mathematical direction of the correlationdirect or reverse, and is determined according to the absolute value of the correlation coefficient.The maximum absolute value of the correlation coefficient is r=1.000,minimum -r=0.000.The degree of correlation was determined by Chertok's scale having six gradations of correlation: |r|<0.1 -there is practically no correlation; 0.1<|r|<0.3-very weak correlation; 0.3<|r|<0.5-weak correlation; 0.5<|r|<0.7averagecorrelation; 0.7<|r|<0.9-close (strong) correlation; 0.9<|r|<1 -very close (very strong) correlation (http:// matstats.ru/).Spearmen's range correlation coefficient was chosen because all variables belong to the range scale as analysis is performed not on the basis of the absolute values of the chosen indicators, but on their ranges -the place of a country among others according to each indicator.Correlation can be statistically very significant (** -with probability of 99%), statistically significant (* -with probability of 95%) and statistically insignificant.
The authors will consider in analysis only the strong and statistically significant correlations.
The following information has been obtained (see Appendix 1): 1) Strong correlation and statistically very significant correlation is observed between the indicator "GDP per capita calculated at purchasing power parity" of the element "Material welfare of people" and the indicator "Infant mortality" of the element "People's health" -the correlation coefficient is negative -0.898**.It means when the state income increases, infant mortality decreases (see Table 1).In the 1970s the American demographist and sociologist Samuel H. Preston (1975) revealed general regularities basing on the materials of different countries from different periods of the 20 th century: the greater economic success of the society and GDP per capita, the more favourable situation in the public health, lower mortality and, respectively, longer life expectancy.The data compiled in Table 1 clearly indicate the result of correlation -when state income increases, infant mortality decreases.1) Strong and statistically significant correlations with a coefficient 0.869** is also observed between the indicator "GDP per capita calculated at purchasing power parity" of the element "Material welfare of people" and the indicator "Life expectancy" of the element "People's health".It can be explained by the fact that countries having a higher level of income have a better development health sector, thus the population has access to a greater range of health services of a higher quality and better health care, which improves their health conditions very much and directly influences the lifespan.Besides, the material welfare of people facilitates the diversity and quality of food, improvement of living conditions and the level of education.As it has already been mentioned above, these regularities had been researched by Samuel H.Preston (1975) -"Preston's curve" shows that people born in a prosperous country have more opportunities to live longer (see Table 2).He also discovered that reaching a certain threshold of economic well-being further increase of income provide less "increase" in health, thus relative indicators related to income distribution in the society become significant.The influence of additional income on health is stronger in the society with low income in comparison to the highincome society.The data of Table 2 confirm the obtained results of correlation that the people's life expectancy directly depends on the state income level.
2) Strong negative and statistically significant correlation is also observed between the indicators "Infant mortality" and "Life expectancy" of the element "People's health" -the correlation coefficient is -0.887**.It can be explained by the fact that both of these indices are closely correlated and depend on the state income.3) Strong and statistically significant correlation is observed between the indicator "GDP per capita calculated at purchasing power parity" of the element "Material welfare of people" and the indicator "The number of people enrolled into tertiary education institutions (gross) % from the total number of inhabitants" of the element "People's education" -the correlation coefficient is 0.730**.It means the more prosperous the country, the more candidates can be enrolled in higher education institution and obtain higher education (see Table 3).The statistical information reflected in Table 3 clearly shows that the number of persons enrolled in higher education institutions directly depends on the state income level.High income states have better developed higher education, it is available to larger number of people, the state can satisfy demand for higher education by providing the infrastructure and qualified academic staff.It leads to feedback: a person with higher education is a person with higher "added value", thus this person has higher return and the contribution of this person into the national economy completely state expenditure on higher education.4) Strong negative and statistically significant correlation is observed between the indicator "Infant mortality" of the element "People's health" and the indicator "The number of people enrolled into tertiary education institutions (gross) % from the total number of inhabitants" of the element "People's education"the correlation coefficient is -0.769**.This correlation is based on the correlations 1) and 2) mentioned above because both the health condition of people and higher education directly depend on the state income level.5) A strong statistically significant correlation exists between the indicator "GDP per capita, calculated at purchasing power parity" of the element "Material welfare of people" and the indicator "coefficient of people's satisfaction with life" of the element "People's satisfaction with life" -strength of the correlation coefficient is 0.703**.Inglehart and his research team conducting a survey on people's satisfaction with life and happiness regarding the world's countries and taking the period from 1981 to 2007 found out that there is a strong correlation between well-being and the level of satisfaction with life.Satisfaction with life is "more sensitive" to the changing economic situation, it is more connected with the economic level of society than happiness.The higher the public welfare, the greater is its impact on people's overall satisfaction with life Inglehart R. (2010).In order to depict strong and statistically significant correlations the authors used the correlations graph, where they reflected strong correlations between model indices mentioned above (see Fig. 3).
Other links between the indicators of the territorial development model observed in the correlation analysis within the research are average strong, weakly strong or insignificant.Due to the space restrictions the authors of the article will not consider these correlations.
However, taking into consideration that the hypothesis put forward in the research envisages exploring the dependence of subjective model indicators on the state income level the authors will consider the link between the indicator "Happiness Index" of the element "People's spirituality" and the indicator "GDP per capita calculated at purchasing power parity" of the element "Material welfare of people".The analysis lets conclude that these two indicators have a weak statistically significant correlation coefficient 0.488**.It is substantiated by the consideration that happiness more depends on spiritual values, and, as researches show, in poor states as well as people feel comparatively happy even if they do not have sufficient education or health care (Inglehart R. 2010).
Observing the correlation between two subjective indicators "coefficient of people's satisfaction with life" and "Happiness index" -there was observed a weak statistically significant correlation with the coefficient 0.497**.As it was mentioned above, people's satisfaction with life correlates strongly with people's material welfare.On the contrary, happiness is more determined by public solidarity, religiosity, and national pride.Religiosity contributes to the sense of certainty and security, especially in countries with unstable economies.Happiness reflects not only people's objective experience but also the way people evaluate this experience under the influence of life values and religious ideological beliefs.These two indices have poor correlation (Inglehart R. 2010).

Conclusions
Summarising the research findings, it can be concluded that the hypothesis put forward has been partially proven.Such subjective indicator "coefficient of people's satisfaction with life" of the element "People's satisfaction with life" of the newly-created methodological model for measuring territorial development correlates with people's material welfare, whereas, the "Happiness index" of the element "People's spirituality" has poor correlation with people's material state.Scientific researches conducted in the world indicate that people's happiness depends on the material values, but not as much as people's satisfaction with life.The results are heavily dependent on the applied survey methodology, by asking questions directly about people's perception of happiness, as well as on what researchers understand by the concept "happiness," whether this concept is separate from the satisfaction with life or it is just a substitute.
Happiness is an indicator with a broad meaning that encompasses such areas of people's lives as people's spirituality, religiosity, people's trust to members of society and country, national pride, family and cultural values, etc. Happiness is dependent on positive emotions, joy, pleasure, self-esteem, independence, presence of friends and interesting job.Together with increasing people's self- reflected strong correlations between model indices mentioned above (see Fig. 3).

Figure 3. Strong correlations between model indices (compiled by the authors)
Other links between the indicators of the territorial development model observed in the correlation analysis within the research are average strong, weakly strong or insignificant.Due to the space restrictions the authors of the article will not consider these correlations.
However, taking into consideration that the hypothesis put forward in the research envisages exploring the dependence of subjective model indicators on the state income level the authors will consider the link between the indicator "Happiness Index" of the element "People's spirituality" and the indicator "GDP per capita calculated at purchasing power parity" of the element "Material welfare of people".The analysis lets conclude that these two indicators have a weak statistically significant correlation coefficient 0.488**.It is substantiated by the consideration that happiness more depends on spiritual values, and, as researches show, in poor states as well as people feel comparatively happy even if they do not have sufficient education or health care (Inglehart R. 2010).
Observing the correlation between two subjective indicators "coefficient of people's satisfaction with life" and "Happiness index" -there was observed a weak statistically significant correlation with the coefficient 0.497**.As it was mentioned above, people's satisfaction with life correlates strongly with people's material welfare.On the contrary, happiness is more determined by public solidarity, religiosity, and national pride.Religiosity contributes to the sense of certainty and security, especially in countries with unstable economies.Happiness reflects not only people's objective experience but also the way people evaluate this experience under the influence of life values and religious ideological beliefs.These two indices have poor correlation (Inglehart R. 2010).

Conclusions
Summarising the research findings, it can be concluded that the hypothesis put forward has been partially proven.Such subjective indicator "coefficient of people's satisfaction with life" of the element "People's satisfaction with life" of the newly-created methodological model for measuring territorial development correlates with people's material welfare, whereas, the "Happiness index" of the element "People's spirituality" has poor correlation with people's material state.Scientific researches conducted in the world indicate that people's happiness depends on the material values, but not as much as people's satisfaction with life.The results are heavily dependent on the applied survey methodology, by asking questions directly about people's perception of happiness, as well as on what researchers understand by the concept "happiness," whether this concept is separate from the satisfaction with life or it is just a substitute.
Happiness is an indicator with a broad meaning that encompasses such areas of people's lives as people's spirituality, religiosity, people's trust to members of society and country, national pride, family and cultural values, etc. Happiness is dependent on positive emotions, joy, pleasure, self-esteem, independence, presence of friends and interesting job.Together with increasing people's self-expression possibilities and freedom of choice, people's sense of happiness also increases.
provide the theoretical substantiation of the newlycreated methodological model for measuring territorial development; 2) To conduct correlation analysis of index indicators of this model regarding countries; 3) To analyse the findings and formulate conclusions.Research object -93 countries.Research subject -territorial development indices of 93 world countries.

Figure 1 .
Figure 1.Development as a process and as a result (compiled by the authors, basing on Boronenko V. (2007)

Figure 1 .
Figure 1.Development as a process and as a result (compiled by the authors, basing on Boronenko V. (2007)

Figure 2 .Figure 2 .
Figure 2. Key elements of the newly-created methodological model for measuring territorial development and their interrelation (compiled by the authors)

Figure 3 .
Figure 3. Strong correlations between model indices (compiled by the authors) is significant at the 0.01 level (2-tailed).* Correlation is significant at the 0.05 level (2-tailed).

Table 1 . Infant mortality in the world
*Classification of the states by the World Bank basing on GNP per capita in 2010 in USD