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<p>There are conflicting theories about whether individuals like or dislike inequality, or in other words, whether living in an unequal country increases or decreases their subjective well-being. Empirical literature has so far focused on income inequality and has not yet reached a consensus. In the present paper, we focus on wealth inequality, an aspect that has so far been overlooked in the happiness literature. The aim of the present paper is to systematically investigate the wealth inequality–happiness relationship and compare the results to the income inequality–happiness association. Furthermore, we focus on different parts of income or wealth distribution, rather than using a single inequality measure. We use data from the integrated World Values Surveys and European Values Surveys for over 50 countries, matched with the World Inequality Database data over the years 1981–2020. Following our analyses, we find some evidence supporting the “tunnel effect” theory: individuals are happier with increases in the top 10% and top 1% shares of wealth and less happy with increases in the middle 40% share of wealth, especially in low- and middle-income countries. In high-income countries, increasing the bottom 50% share of wealth increases individuals’ life satisfaction, suggesting that they favor redistribution.</p>
</abstract>

There are conflicting theories about whether individuals like or dislike inequality, or in other words, whether living in an unequal country increases or decreases their subjective well-being. Empirical literature has so far focused on income inequality and has not yet reached a consensus. In the present paper, we focus on wealth inequality, an aspect that has so far been overlooked in the happiness literature. The aim of the present paper is to systematically investigate the wealth inequality–happiness relationship and compare the results to the income inequality–happiness association. Furthermore, we focus on different parts of income or wealth distribution, rather than using a single inequality measure. We use data from the integrated World Values Surveys and European Values Surveys for over 50 countries, matched with the World Inequality Database data over the years 1981–2020. Following our analyses, we find some evidence supporting the “tunnel effect” theory: individuals are happier with increases in the top 10% and top 1% shares of wealth and less happy with increases in the middle 40% share of wealth, especially in low- and middle-income countries. In high-income countries, increasing the bottom 50% share of wealth increases individuals’ life satisfaction, suggesting that they favor redistribution.

Wealth inequality, income inequality, and subjective well-being: A cross-country study

International Journal of Management and Economics

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

There are conflicting theories about whether individuals like or dislike inequality, or in other words, whether living in an unequal country increases or...

Wealth inequality, income inequality, and subjective well-being: A cross-country study

Article Category: Empirical Paper

Online veröffentlicht: 19. Juni 2024

Seitenbereich: -

Eingereicht: 25. Apr. 2023

Akzeptiert: 12. Apr. 2024

DOI: https://doi.org/10.2478/ijme-2024-0017

Schlüsselwörter
income inequality, wealth inequality, happiness, subjective well-being, life satisfaction

© 2024 Katarzyna Sałach-Dróżdż, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Wealth inequality, income inequality, and subjective well-being: A cross-country study

Article Category: Empirical Paper

Online veröffentlicht: 19. Juni 2024

Seitenbereich: -

Eingereicht: 25. Apr. 2023

Akzeptiert: 12. Apr. 2024

DOI: https://doi.org/10.2478/ijme-2024-0017

Schlüsselwörterincome inequality, wealth inequality, happiness, subjective well-being, life satisfaction

© 2024 Katarzyna Sałach-Dróżdż, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Schlüsselwörter
income inequality, wealth inequality, happiness, subjective well-being, life satisfaction