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Values, inequality and happiness

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Author Info
Claudia Biancotti () (Bank of Italy, Economic and Financial Statistics Department)
Giovanni D'Alessio () (Bank of Italy, Economic and Financial Statistics Department)

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Abstract

This paper examines the relationship between inequality and happiness through the lens of heterogeneous values, beliefs and inclinations. Drawing upon opinion data from the European Social Survey for twenty-three countries, we find that individual views on a wide range of themes can be effectively summarized by two orthogonal dimensions: moderation and inclusiveness. The former is defined as a tendency to take mild stands on issues rather than extreme ones; the latter is defined as the degree of support for a social model that grants equal rights to everyone who willingly subscribes to a shared set of rules, regardless of background and circumstances. These traits matter when it comes to how inequality affects subjective well-being; specifically, those who are either more moderate or more inclusive than their average compatriots prefer lower levels of inequality. In the case of moderation, inequality aversion can be read in terms of a desire for stability: people who are reluctant to take strong stands are especially wary of conflict, tension and unrest, which often go handin-hand with disparities. In the case of inclusiveness, the main element at play is likely to be distress accruing on a perception of unfairness.

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Paper provided by Bank of Italy, Economic Research Department in its series Temi di discussione (Economic working papers) with number 669.

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Date of creation: Apr 2008
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Handle: RePEc:bdi:wptemi:td_669_08

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Related research
Keywords: happiness; inequality; heterogeneity;

Find related papers by JEL classification:
D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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