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The emerging aversion to inequality - Evidence from long subjective data

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Irena Grosfeld
Claudia Senik

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Abstract

This paper provides evidence of the emergence of inequality aversion. Using a series of surveys of the Polish population, of unusual length and frequency, we observe that during a period of sustained income growth, as inequality increases, subjective individual satisfaction stops following the ascension of income at a certain point of time. We identify a structural break in the relationship between income inequality and subjective well-being. Inequality, initially perceived as a positive signal of increased opportunities, starts to undermine satisfaction after a couple of years when individuals become skeptical about the legitimacy of the enrichment of reform winners.

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Paper provided by PSE (Ecole normale supérieure) in its series PSE Working Papers with number 2008-19.

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Date of creation: Apr 2008
Date of revision: Jul 2008
Handle: RePEc:pse:psecon:2008-19

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  18. Rafael Di Tella & Robert J. MacCulloch & Andrew J. Oswald, 2001. "Preferences over Inflation and Unemployment: Evidence from Surveys of Happiness," American Economic Review, American Economic Association, vol. 91(1), pages 335-341, March. [Downloadable!] (restricted)
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  20. Hirschman, Albert O., 1973. "The changing tolerance for income inequality in the course of economic development," World Development, Elsevier, vol. 1(12), pages 29-36, December. [Downloadable!] (restricted)
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  28. Jushan Bai & Pierre Perron, 1998. "Estimating and Testing Linear Models with Multiple Structural Changes," Econometrica, Econometric Society, vol. 66(1), pages 47-78, January.
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