Happiness Inequality: How Much is Reasonable?
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
Volume (Year): 110 (2013)
Issue (Month): 1 (January)
|Contact details of provider:|| Web page: http://www.springer.com/economics/journal/11135|
|Order Information:||Web: http://link.springer.de/orders.htm|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Richard Layard & Guy Mayraz & Stephen J Nickell, 2007.
"The marginal utility of income,"
LSE Research Online Documents on Economics
19745, London School of Economics and Political Science, LSE Library.
- Richard Layard & Guy Mayraz & Stephen Nickell, 2007. "The Marginal Utility of Income," CEP Discussion Papers dp0784, Centre for Economic Performance, LSE.
- Richard Layard & Guy Mayraz & Stephen J. Nickell, 2007. "The Marginal Utility of Income," SOEPpapers on Multidisciplinary Panel Data Research 50, DIW Berlin, The German Socio-Economic Panel (SOEP).
- Bartunek, Kenneth S & Chowdhury, Mustafa, 1997. "Implied Risk Aversion Parameter from Option Prices," The Financial Review, Eastern Finance Association, vol. 32(1), pages 107-24, February.
- Hansen, Lars Peter & Singleton, Kenneth J, 1983. "Stochastic Consumption, Risk Aversion, and the Temporal Behavior of Asset Returns," Journal of Political Economy, University of Chicago Press, vol. 91(2), pages 249-65, April.
- Vani Borooah, 2006. "How much happiness is there in the world? A cross-country study," Applied Economics Letters, Taylor & Francis Journals, vol. 13(8), pages 483-488.
- Ruut Veenhoven, 2005. "Return of Inequality in Modern Society? Test by Dispersion of Life-Satisfaction Across Time and Nations," Journal of Happiness Studies, Springer, vol. 6(4), pages 457-487, December.
- Grant Duncan, 2010. "Should Happiness-Maximization be the Goal of Government?," Journal of Happiness Studies, Springer, vol. 11(2), pages 163-178, April.
- Weber, Warren E, 1975. "Interest Rates, Inflation, and Consumer Expenditures," American Economic Review, American Economic Association, vol. 65(5), pages 843-58, December.
- Jan Ott, 2005. "Level and Inequality of Happiness in Nations: Does Greater Happiness of a Greater Number Imply Greater Inequality in Happiness?," Journal of Happiness Studies, Springer, vol. 6(4), pages 397-420, December.
- Friend, Irwin & Blume, Marshall E, 1975. "The Demand for Risky Assets," American Economic Review, American Economic Association, vol. 65(5), pages 900-922, December.
- N. Gregory Mankiw, 1983.
"Consumer Durables and the Real Interest Rate,"
NBER Working Papers
1148, National Bureau of Economic Research, Inc.
- Wim Kalmijn & Ruut Veenhoven, 2005. "Measuring Inequality of Happiness in Nations: In Search for Proper Statistics," Journal of Happiness Studies, Springer, vol. 6(4), pages 357-396, December.
- Szpiro, George G, 1986. "Measuring Risk Aversion: An Alternative Approach," The Review of Economics and Statistics, MIT Press, vol. 68(1), pages 156-59, February.
When requesting a correction, please mention this item's handle: RePEc:spr:soinre:v:110:y:2013:i:1:p:257-269. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn)or (Christopher F Baum)
If references are entirely missing, you can add them using this form.