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Ingreso y desigualdad: ¿Cómo afectan a la felicidad en América Latina?

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Listed:
  • Mariana Gerstenblüth

    () (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)

  • Natalia Melgar

    () (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)

  • Máximo Rossi

    () (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)

Abstract

Latin America is known as the most unequal region in the world. However, the effect of income inequality on people’s welfare is still an open question. This paper assesses the relationship between income distribution and welfare by considering the levels of happiness reported by people. The main contribution of this paper is the examination of not only the direct effect of economic performance on happiness, but also the indirect macroeconomic effects through the subjective income scale. Our database comes from the 2008 Latino-barometer survey and we estimate probit models. Findings indicate that while poverty, income per capita and the human development index have only a significant direct impact on individual happiness, income distribution play an indirect role. In particular, we find that even when it plays non significant role, it matters through the subjective income level. The results show that richer people tend to be happier, however, the interaction term between the self-placement in the income scale and inequality is negatively related to happiness. Hence, individuals with higher income levels will be happier in countries where inequality is lower.

Suggested Citation

  • Mariana Gerstenblüth & Natalia Melgar & Máximo Rossi, 2010. "Ingreso y desigualdad: ¿Cómo afectan a la felicidad en América Latina?," Documentos de Trabajo (working papers) 0910, Department of Economics - dECON.
  • Handle: RePEc:ude:wpaper:0910
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    Keywords

    happiness; inequality; Latin America;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D60 - Microeconomics - - Welfare Economics - - - General
    • F00 - International Economics - - General - - - General
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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