IDEAS home Printed from https://ideas.repec.org/p/aia/ginidp/38.html
   My bibliography  Save this paper

GINI DP 38: Inequality and Happiness: A Survey

Author

Listed:
  • Ada Ferrer-i-carbonell

    (Campus U.A.B., Institut d'Anàlisi Econòmica, IAE(CSIC))

  • Ramos, X. (Xavier)

Abstract

In recent years there has been an accumulation of empirical evidence suggesting that individuals dislike inequality (Alesina and Giuliano, 2011 and Dawes et al., 2007). The literature has built upon estimating the degree of this dislike as well as its causes. The use of self-reported measures of satisfaction or well-being as a proxy for utility has been one of the empirical strategies used to this end. In this survey we review the papers that estimate or examine the relationship between inequality and self-reported happiness, and find that inequality reduces happiness in Western societies. The evidence for non-Western societies is more mixed and less reliable. Notwithstanding that, trust in the institutions seems to play an important role in shaping the relationship between income inequality and subjective wellbeing. We conclude with suggestions for further research.

Suggested Citation

  • Ada Ferrer-i-carbonell & Ramos, X. (Xavier), 2012. "GINI DP 38: Inequality and Happiness: A Survey," GINI Discussion Papers 38, AIAS, Amsterdam Institute for Advanced Labour Studies.
    • Handle: RePEc:aia:ginidp:38
    as

    Download full text from publisher

    File URL: https://www1.feb.uva.nl/aias/DP38-Ferrer-i-Carbonell,Ramos.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Peter Sanfey & Utku Teksoz, 2007. "Does transition make you happy?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 15, pages 707-731, October.
    2. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory of Fairness, Competition, and Cooperation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(3), pages 817-868.
    3. Roland Benabou & Efe A. Ok, 2001. "Social Mobility and the Demand for Redistribution: The Poum Hypothesis," The Quarterly Journal of Economics, Oxford University Press, vol. 116(2), pages 447-487.
    4. Christopher T. Dawes & James H. Fowler & Tim Johnson & Richard McElreath & Oleg Smirnov, 2007. "Egalitarian motives in humans," Nature, Nature, vol. 446(7137), pages 794-796, April.
    5. van Praag, Bernard M S & Hagenaars, Aldi J M & van Weeren, Hans, 1982. "Poverty in Europe," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 28(3), pages 345-359, September.
    6. Thomas Piketty, 1995. "Social Mobility and Redistributive Politics," The Quarterly Journal of Economics, Oxford University Press, vol. 110(3), pages 551-584.
    7. Algan, Yann & Cahuc, Pierre & Sangnier, Marc, 2011. "Efficient and Inefficient Welfare States," IZA Discussion Papers 5445, Institute of Labor Economics (IZA).
    8. Irena Grosfeld & Claudia Senik, 2010. "The emerging aversion to inequality," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 18(1), pages 1-26, January.
    9. Ed Hopkins, 2008. "Inequality, happiness and relative concerns: What actually is their relationship?," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 6(4), pages 351-372, December.
    10. Eggers, Andrew & Gaddy, Clifford & Graham, Carol, 2006. "Well-being and unemployment in Russia in the 1990s: Can society's suffering be individuals' solace?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 35(2), pages 209-242, April.
    11. Alesina, Alberto & Di Tella, Rafael & MacCulloch, Robert, 2004. "Inequality and happiness: are Europeans and Americans different?," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 2009-2042, August.
    12. Bruno Frey & Matthias Benz & Alois Stutzer, 2004. "Introducing Procedural Utility: Not Only What, but Also How Matters," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 160(3), pages 377-401, September.
    13. Irena Grosfeld & Claudia Senik, 2010. "The emerging aversion to inequality," PSE-Ecole d'économie de Paris (Postprint) halshs-00754486, HAL.
    14. Ada Ferrer-i-Carbonell & Xavier Ramos, 2010. "Inequality Aversion and Risk Attitudes," SOEPpapers on Multidisciplinary Panel Data Research 271, DIW Berlin, The German Socio-Economic Panel (SOEP).
    15. Claudia Senik, 2009. "Income Distribution and Subjective Happiness: A Survey," OECD Social, Employment and Migration Working Papers 96, OECD Publishing.
    16. Cruces, Guillermo & Perez-Truglia, Ricardo & Tetaz, Martin, 2013. "Biased perceptions of income distribution and preferences for redistribution: Evidence from a survey experiment," Journal of Public Economics, Elsevier, vol. 98(C), pages 100-112.
    17. Erzo F. P. Luttmer, 2005. "Neighbors as Negatives: Relative Earnings and Well-Being," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(3), pages 963-1002.
    18. Yann Algan & Pierre Cahuc & Marc Sangnier, 2016. "Trust and the Welfare State: the Twin Peaks Curve," Economic Journal, Royal Economic Society, vol. 126(593), pages 861-883, June.
    19. Alesina, Alberto & Angeletos, George-Marios, 2005. "Corruption, inequality, and fairness," Journal of Monetary Economics, Elsevier, vol. 52(7), pages 1227-1244, October.
    20. Tomes, Nigel, 1986. "Income distribution, happiness and satisfaction: A direct test of the interdependent preferences model," Journal of Economic Psychology, Elsevier, vol. 7(4), pages 425-446, December.
    21. Morawetz, David, 1977. "Income Distribution and Self-Rated Happiness: Some Empirical Evidence," Economic Journal, Royal Economic Society, vol. 87(347), pages 511-522, September.
    22. Spilimbergo, Antonio & Giuliano, Paola, 2009. "Growing Up in a Recession: Beliefs and the Macroeconomy," CEPR Discussion Papers 7399, C.E.P.R. Discussion Papers.
    23. Schwarze, Johannes & Harpfer, Marco, 2007. "Are people inequality averse, and do they prefer redistribution by the state?: Evidence from German longitudinal data on life satisfaction," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 36(2), pages 233-249, April.
    24. Ferrer-i-Carbonell, Ada, 2005. "Income and well-being: an empirical analysis of the comparison income effect," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 997-1019, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:aia:ginidp:dp38 is not listed on IDEAS
    2. Ada Ferrer-i-Carbonell & Xavier Ramos, 2014. "Inequality And Happiness," Journal of Economic Surveys, Wiley Blackwell, vol. 28(5), pages 1016-1027, December.
    3. Clark, Andrew E. & D'Ambrosio, Conchita, 2014. "Attitudes to Income Inequality: Experimental and Survey Evidence," IZA Discussion Papers 8136, Institute of Labor Economics (IZA).
    4. Tamas Hajdu & Gabor Hajdu, 2013. "Are more equal societies happier? Subjective well-being, income inequality, and redistribution," CERS-IE WORKING PAPERS 1320, Institute of Economics, Centre for Economic and Regional Studies.
    5. Antonio M. Espín & Dolores Moreno-Herrero & José Sánchez-Campillo & José A. Rodríguez Martín, 2018. "Do Envy and Compassion Pave the Way to Unhappiness? Social Preferences and Life Satisfaction in a Spanish City," Journal of Happiness Studies, Springer, vol. 19(2), pages 443-469, February.
    6. Woo Chang Kang & Jae Seung Lee & BK Song, 2020. "Envy and Pride: How Economic Inequality Deepens Happiness Inequality in South Korea," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 150(2), pages 617-637, July.
    7. Peng Wang & Jay Pan & Zhehui Luo, 2015. "The Impact of Income Inequality on Individual Happiness: Evidence from China," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 121(2), pages 413-435, April.
    8. Hajdu, Tamás & Hajdu, Gábor, 2014. "Reduction of income inequality and subjective well-being in Europe," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 8, pages 1-29.
    9. Cojocaru, Alexandru, 2014. "Fairness and inequality tolerance: Evidence from the Life in Transition Survey," Journal of Comparative Economics, Elsevier, vol. 42(3), pages 590-608.
    10. Zeynep B. Ugur, 2021. "How does Inequality Hamper Subjective Well-being? The Role of Fairness," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 158(2), pages 377-407, December.
    11. Kalenborn, Christine & Lessmann, Christian, 2014. "Regional Income Inequality lowers Life Satisfaction: Evidence from OECD Countries," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100561, Verein für Socialpolitik / German Economic Association.
    12. Adalgiso Amendola & Roberto Dell’Anno & Lavinia Parisi, 2019. "Happiness and inequality in European countries: is it a matter of peer group comparisons?," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 36(2), pages 473-508, July.
    13. Eiji Yamamura, 2021. "Information of income position and its impact on perceived tax burden and preference for redistribution: An Internet Survey Experiment," Papers 2106.11537, arXiv.org.
    14. Martin Schröder, 2018. "Income Inequality and Life Satisfaction: Unrelated Between Countries, Associated Within Countries Over Time," Journal of Happiness Studies, Springer, vol. 19(4), pages 1021-1043, April.
    15. Kaizhi Yu & Yun Zhang & Hong Zou & Chenchen Wang, 2019. "Absolute Income, Income Inequality and the Subjective Well-Being of Migrant Workers in China: Toward an Understanding of the Relationship and Its Psychological Mechanisms," IJERPH, MDPI, vol. 16(14), pages 1-27, July.
    16. Abigail Mcknight & Brian Nolan, 2012. "GINI Intermediate Report WP 4: Social Impacts of Inequalities," GINI Discussion Papers wp4, AIAS, Amsterdam Institute for Advanced Labour Studies.
    17. Ada Ferrer-i-Carbonell, 2013. "Happiness economics," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 4(1), pages 35-60, March.
    18. Marcelo Bérgolo & Gabriel Burdín & Santiago Burone & Mauricio de Rosa & Matías Giaccobasso & Martín Leites, 2020. "Dissecting Inequality-Averse Preferences," Documentos de Trabajo (working papers) 20-19, Instituto de Economía - IECON.
    19. Zhilin Tang, 2014. "They Are Richer But Are They Happier? Subjective Well-Being of Chinese Citizens Across the Reform Era," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 117(1), pages 145-164, May.
    20. Eiji Yamamura, 2014. "Trust in government and its effect on preferences for income redistribution and perceived tax burden," Economics of Governance, Springer, vol. 15(1), pages 71-100, February.
    21. Jiawen Huang, 2019. "Income Inequality, Distributive Justice Beliefs, and Happiness in China: Evidence from a Nationwide Survey," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 142(1), pages 83-105, February.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aia:ginidp:38. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiemer Salverda (email available below). General contact details of provider: https://edirc.repec.org/data/aiuvanl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.