An Evaluation of Common Explanations for the Impact of Income Inequality on Life Satisfaction

Benjamin Schalembier ()
Additional contact information
Benjamin Schalembier: Ghent University

Journal of Happiness Studies, 2019, vol. 20, issue 3, No 6, 777-794

Abstract: Abstract This study explains how income inequality affects life satisfaction in Europe. Although research about the impact of income inequality on life satisfaction is inconclusive, authors suggest several reasons for its potential impact. In the literature section we discuss three types of explanations for the impact of inequality: pure aversion for inequality, aversion for inequality motivated by how an individual is personally affected by inequality and preferences for equality of opportunities. In order to test these explanations, we examine how three corresponding variables, respectively attitude towards redistribution, income and perceived mobility, interact with both actual and perceived income inequality in multilevel analyses using data from the European Values Survey. Our results reveal that there are significant differences between how people are affected by actual income inequality and how they are affected by perceived income inequality. The impact of perceived income inequality on life satisfaction depends on perceived mobility in society and income, while the impact of actual income inequality solely depends on perceived mobility. We conclude that traditional explanations often erroneously assume that people correctly assess income inequality. Moreover these explanations are more capable of clarifying the effect of perceived income inequality on life satisfaction than that of actual inequality.

Keywords: Income inequality; Income distribution; Life satisfaction; Perceived income inequality; Perceived mobility (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://link.springer.com/10.1007/s10902-018-9970-6 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:jhappi:v:20:y:2019:i:3:d:10.1007_s10902-018-9970-6

Ordering information: This journal article can be ordered from
http://www.springer. ... fe/journal/10902/PS2

DOI: 10.1007/s10902-018-9970-6

Access Statistics for this article

Journal of Happiness Studies is currently edited by Antonella Delle Fave

More articles in Journal of Happiness Studies from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().