Life Satisfaction and Inequality in Slovakia: The Role of Income, Consumption and Wealth

Biswajit Banerjee and Peter Tóth ()
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Biswajit Banerjee: National Bank of Slovakia
Peter Tóth: National Bank of Slovakia

Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, 2025, vol. 177, issue 1, No 5, 93-126

Abstract: Abstract In recent years, a small number of studies have emphasized that subjective well-being of individuals depends not only on income but also consumption and wealth. However, only a few have examined the influence of all three variables simultaneously. Empirical studies have also analyzed the role of self-centered and community-centered inequalities but the inclusion of both measures in the same specification is scarce. In a departure from much of the existing literature, this paper analyzes concurrently the influence of all three economic well-being indicators and both types of inequalities on subjective well-being. We find that absolute levels of income, consumption and wealth all have a significant positive effect that remains robust even after the inclusion of self-centered and community-centered inequalities in the regression equations. The evidence indicates that both types of inequalities are important considerations for subjective well-being, but with different influences. Self-centered inequality measured using reference group average has a positive signaling effect, while inequality defined by the position of an individual within the distribution of the relevant economic well-being indicator has a negative comparison effect. Whereas community-centered inequality in income has a positive signaling effect, consumption and wealth inequalities have a negative comparison effect.

Keywords: Subjective well-being; Income; Consumption; Wealth; Self-centered inequality; Community-centered inequality (search for similar items in EconPapers)
JEL-codes: D12 D31 G51 I31 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s11205-024-03491-9

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