Quantile Regression and Happiness Inequality: Evidence from Germany

Niklas Scheuer

No 2026-07, Research Papers in Economics from University of Trier, Department of Economics

Abstract: Using data from the German Socio-Economic Panel, this paper examines how socioeconomic characteristics shape the distribution of happiness in Germany and how these effects translate into happiness inequality. I estimate quantile regressions for 2012 and show that key socioeconomic characteristics affect happiness differently across the happiness distribution. Building on this heterogeneity, I construct a counterfactual 2017 happiness distribution by evaluating the 2017 covariate distribution under the estimated 2012 quantile-regression coefficient structure. I then examine happiness inequality and find that, despite the stability of observed happiness inequality in the data, the counterfactual distribution predicts a more equal distribution of happiness, especially according to the Gini coefficient. To reconcile observed and counterfactual inequality, I distinguish between a mechanical effect arising from changes in observed characteristics under the estimated model and a residual effect capturing the remaining deviation. The results suggest that the persistence of happiness inequality reflects residual factors not captured by observed covariates or by systematic changes in estimated returns.

Keywords: Life satisfaction; Happiness; Quantile regression; Income; Wealth; Distributional heterogeneity; Germany; Counterfactual (search for similar items in EconPapers)
JEL-codes: C14 C21 D39 D63 I31 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2026
New Economics Papers: this item is included in nep-ltv
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Persistent link: https://EconPapers.repec.org/RePEc:trr:wpaper:202607

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