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Happiness Inequality: How Much is Reasonable?

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  • Néstor Gandelman

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  • 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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    References listed on IDEAS

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    8. 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.
    9. Mankiw, N Gregory, 1985. "Consumer Durables and the Real Interest Rate," The Review of Economics and Statistics, MIT Press, vol. 67(3), pages 353-362, August.
    10. 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.
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    Citations

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    Cited by:

    1. Yang, Jidong & Liu, Kai & Zhang, Yiran, 2015. "Happiness Inequality in China," MPRA Paper 66623, University Library of Munich, Germany.
    2. 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.
    3. repec:spr:soinre:v:133:y:2017:i:1:d:10.1007_s11205-016-1359-5 is not listed on IDEAS
    4. repec:wfo:wstudy:47495 is not listed on IDEAS
    5. Bodo Knoll & Hans Pitlik, 2016. "Who benefits from big government? A life satisfaction approach," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 43(3), pages 533-557, August.
    6. Gandelman, Néstor & Hernández-Murillo, Rubén, 2013. "What do happiness and health satisfaction data tell us about relative risk aversion?," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 301-312.
    7. Gandelman, Nestor & Hernandez-Murillo, Ruben, 2015. "Risk Aversion at the Country Level," Review, Federal Reserve Bank of St. Louis, vol. 97(1), pages 53-66.
    8. repec:eee:ecmode:v:66:y:2017:i:c:p:272-278 is not listed on IDEAS
    9. Edsel Beja, 2014. "Yet, Two More Revisions to the Human Development Index," Forum for Social Economics, Taylor & Francis Journals, vol. 43(1), pages 27-39, April.
    10. Niimi, Yoko, 2015. "Can happiness provide new insights into social inequality? Evidence from Japan," MPRA Paper 64720, University Library of Munich, Germany.
    11. Peter Krause, 2015. "Quality of Life and Inequality," SOEPpapers on Multidisciplinary Panel Data Research 765, DIW Berlin, The German Socio-Economic Panel (SOEP).

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