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

Mariana Gerstenblüth (), Natalia Melgar () and Maximo Rossi ()
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Natalia Melgar: Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República

No 910, Documentos de Trabajo (working papers) from Department of Economics - dECON

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.

Keywords: happiness; inequality; Latin America (search for similar items in EconPapers)
JEL-codes: D31 D60 F00 I32 O57 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cis and nep-lam
Date: 2010-06
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Journal Article: Ingreso y desigualdad: ¿Cómo afectan a la felicidad en América Latina? (2013) Downloads
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