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The Impact of Income Inequality on Subjective Well-Being: The Case of China

Author

Listed:
  • Jiawen Ding

    (Universidad Autóma de Madrid)

  • Javier Salinas-Jiménez

    (Universidad Autóma de Madrid)

  • Maria del Mar Salinas-Jiménez

    (Universidad de Extremadura)

Abstract

The growing literature on happiness economics suggests that, together with absolute income, individual well-being is affected by relative income both horizontally (i.e. because of differences between an individual’s income and that of others to whom she compares) and vertically (i.e. compared to changes in individuals’ own income). Moreover, the way in which individuals value their relative situation and the distribution of income will determine how inequality affects individual well-being. This paper aims to examine the relationship between these variables in the case of China, focusing mainly on how income inequality affects subjective well-being. Using data from the CGSS, the results suggest that both absolute and relative income affect subject well-being, and that an inverted-U shaped relationship between income inequality and individual well-being appears at least for urban residents, whereas this relationship tend to be negative in the case of people living in rural areas.

Suggested Citation

  • Jiawen Ding & Javier Salinas-Jiménez & Maria del Mar Salinas-Jiménez, 2021. "The Impact of Income Inequality on Subjective Well-Being: The Case of China," Journal of Happiness Studies, Springer, vol. 22(2), pages 845-866, February.
    • Handle: RePEc:spr:jhappi:v:22:y:2021:i:2:d:10.1007_s10902-020-00254-4
    DOI: 10.1007/s10902-020-00254-4
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    5. Wanglin Ma & Puneet Vatsa & Hongyun Zheng & Emmanuel Donkor & Victor Owusu, 2023. "Does Adoption of Information and Communication Technology Reduce Objective and Subjective Well-Being Inequality? Evidence from China," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 169(1), pages 55-77, September.
    6. Ary José A. Souza-Jr., 2022. "Subjective well-being and climate change: Evidence for Portugal," Working Papers REM 2022/0213, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    7. Sudeshna Ghosh & Buhari Doğan & Muhlis Can & Muhammad Ibrahim Shah & Nicholas Apergis, 2023. "Does economic structure matter for income inequality?," Quality & Quantity: International Journal of Methodology, Springer, vol. 57(3), pages 2507-2527, June.
    8. Arjen Schepen & Martijn J. Burger, 2022. "Professional Financial Advice and Subjective Well-Being," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 17(5), pages 2967-3004, October.
    9. Yi-Bin Chiu & Zhen Wang & Xu Ye, 2023. "Household gift-giving consumption and subjective well-being: evidence from rural China," Review of Economics of the Household, Springer, vol. 21(4), pages 1453-1472, December.
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