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GINI DP 38: Inequality and Happiness: A Survey

Ada Ferrer-i-Carbonell and Xavi Ramos ()

GINI Discussion Papers from AIAS, Amsterdam Institute for Advanced Labour Studies

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.

Date: 2012-05
New Economics Papers: this item is included in nep-evo, nep-hap, nep-hpe and nep-ltv
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