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Happiness Inequality: How Much is Reasonable?

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  • Néstor Gandelman
  • Rafael Porzecanski

Abstract

We compute the Gini indexes for income, happiness and various simulated utility levels. Due to decreasing marginal utility of income, happiness inequality should be lower than income inequality. We find that happiness inequality is about half that of income inequality. To compute the utility levels we need to assume values for a key parameter that can be interpreted as a measure of relative risk aversion. If this coefficient is above one, as many economists believe, then a large part of happiness inequality is not related to pecuniary dimensions of life. Copyright Springer Science+Business Media B.V. 2013

Suggested Citation

  • Néstor Gandelman & Rafael Porzecanski, 2013. "Happiness Inequality: How Much is Reasonable?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 110(1), pages 257-269, January.
    • Handle: RePEc:spr:soinre:v:110:y:2013:i:1:p:257-269
    DOI: 10.1007/s11205-011-9929-z
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    Cited by:

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    3. Nestor Gandelman & Ruben Hernandez-Murillo, 2015. "Risk Aversion at the Country Level," Review, Federal Reserve Bank of St. Louis, vol. 97(1), pages 53-66.
    4. Jidong Yang & Kai Liu & Yiran Zhang, 2019. "Happiness Inequality in China," Journal of Happiness Studies, Springer, vol. 20(8), pages 2747-2771, December.
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    6. Yang, Jidong & Liu, Kai & Zhang, Yiran, 2015. "Happiness Inequality in China," MPRA Paper 66623, University Library of Munich, Germany.
    7. Niimi, Yoko, 2015. "Can happiness provide new insights into social inequality? Evidence from Japan," MPRA Paper 64720, University Library of Munich, Germany.
    8. Christopher Ambrey & Christopher Fleming, 2014. "Life Satisfaction in Australia: Evidence from Ten Years of the HILDA Survey," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 115(2), pages 691-714, January.
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    11. Ummugulsum Aysan, 2021. "The Welfare States and Happiness Inequalities in Europe," Journal of Social Policy Conferences, Istanbul University, Faculty of Economics, vol. 0(81), pages 71-99, December.
    12. Lous, Bjorn, 2020. "On free markets, income inequality, happiness and trust," Other publications TiSEM e2480eed-722b-4e2a-8e29-4, Tilburg University, School of Economics and Management.
    13. Umakrishnan Kollamparambil, 2020. "Happiness, Happiness Inequality and Income Dynamics in South Africa," Journal of Happiness Studies, Springer, vol. 21(1), pages 201-222, January.
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