New Zealand ranks third in the world in a survey of economic freedom.

The country has retained the ranking behind Hong Kong and Singapore in the survey produced by the Fraser Institute in Canada.

The 2010 report is based on data from 2008, and measures the degree to which the policies and institutions of countries are supportive of economic freedom.

Business Roundtable executive director Roger Kerr says countries with freer economies do best in terms of growth and levels of income.

He says while New Zealand has retained its ranking, its overall score has been slipping since it peaked in the mid nineties.

Zimbabwe produced the lowest level of economist freedom, followed by Myanmar and Angola.

The average economic freedom index rose from 5.53 out of 10 in 1980 to 6.74 in 2007, but fell back to 6.67 in 2008, the most recent year for which data was available.

It is the first time in a quarter of a century the average rating for the world has dropped, the think tank said.

The research shows that individuals living in countries with high levels of economic freedom enjoy higher levels of satisfaction, greater individual freedoms, higher GDP per capita and a greater life expectancy.

Life expectancy is 79.3 years in the quartile of countries with the greatest economic freedom but 59.9 years among those countries in the bottom quartile.

People in those countries who have the greatest economic freedom report a life satisfaction of 7.5 out of 10 while those in the bottom quartile report a life satisfaction of 4.7

International rankings

1. Hong Kong
2. Singapore
3. New Zealand
4. Switzerland
5. Chile
6. United States
7. Canada
8. Australia
9. Mauritius
10. United Kingdom

- NZ Herald staff