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Does Inequality Harm the Middle Class?

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  • Liliana Winkelmann
  • Rainer Winkelmann

Abstract

The paper provides estimates of the effect of economic inequality on middle class well being in Switzerland. Economic well being is proxied by a person's satisfaction with his/her income. Two inequality indicators are used, one standard (the Gini coefficient of the pre‐tax income distribution) and one novel (the number of luxury car registrations per 1000 population). Identification is through cross‐sectional variation of these indicators at various levels of spatial aggregation. Results using data from the Swiss Household Panel confirm the existence of a robust inverse relationship between inequality and satisfaction among the middle class.

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  • Liliana Winkelmann & Rainer Winkelmann, 2010. "Does Inequality Harm the Middle Class?," Kyklos, Wiley Blackwell, vol. 63(2), pages 301-316, May.
    • Handle: RePEc:bla:kyklos:v:63:y:2010:i:2:p:301-316
    DOI: 10.1111/j.1467-6435.2010.00474.x
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    1. Hajdu, Tamás & Hajdu, Gábor, 2014. "Reduction of income inequality and subjective well-being in Europe," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 8, pages 1-29.
    2. Clark, Andrew E. & D'Ambrosio, Conchita, 2014. "Attitudes to Income Inequality: Experimental and Survey Evidence," IZA Discussion Papers 8136, Institute of Labor Economics (IZA).
    3. Cordero, Jose M. & Salinas-Jiménez, Javier & Salinas-Jiménez, Mª Mar, 2014. "Assessing the level of happiness across countries: A robust frontier approach," MPRA Paper 57784, University Library of Munich, Germany.
    4. Yselle Flora Kuete Malah, 2021. "Is happiness in the hands of women?," Economics Bulletin, AccessEcon, vol. 41(2), pages 573-587.
    5. Ozan Eksi & Neslihan Kaya, 2017. "Life Satisfaction and Keeping Up with Other Countries," Journal of Happiness Studies, Springer, vol. 18(1), pages 199-228, February.
    6. Nuno Crespo & Sandrina Berthault Moreira & Nádia Simões, 2011. "An integrated approach for the measurement of inequality, poverty, and richness," Working Papers 205, ECINEQ, Society for the Study of Economic Inequality.
    7. Winkelmann, Rainer, 2012. "Conspicuous consumption and satisfaction," Journal of Economic Psychology, Elsevier, vol. 33(1), pages 183-191.
    8. Blanchflower, David G; Oswald, Andrew, 2011. "International Happiness," CAGE Online Working Paper Series 39, Competitive Advantage in the Global Economy (CAGE).
    9. Pasquale Tridico, 2015. "The Rise Of Income Inequality In Oecd Countries," Departmental Working Papers of Economics - University 'Roma Tre' 0201, Department of Economics - University Roma Tre.
    10. Adam Okulicz-Kozaryn & Joan Maya Mazelis, 2017. "More Unequal in Income, More Unequal in Wellbeing," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 132(3), pages 953-975, July.
    11. Pascarn R. Dickinson & Philip S. Morrison, 2022. "Aversion to Local Wellbeing Inequality is Moderated by Social Engagement and Sense of Community," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 159(3), pages 907-926, February.
    12. Adam Okulicz-Kozaryn, 2014. "Winners and Losers in Transition: Preferences for Redistribution and Nostalgia for Communism in Eastern Europe," Kyklos, Wiley Blackwell, vol. 67(3), pages 447-461, August.
    13. Kaplanoglou, Georgia, 2022. "Consumption inequality and poverty in Greece: Evidence and lessons from a decade-long crisis," Economic Analysis and Policy, Elsevier, vol. 75(C), pages 244-261.

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