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

Katarzyna Sałach-Dróżdż
Katarzyna Sałach-Dróżdż
   | 19 juin 2024
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Article Category: Empirical Paper
Publié en ligne: 19 juin 2024
Pages: -
Reçu: 25 avr. 2023
Accepté: 12 avr. 2024
DOI: https://doi.org/10.2478/ijme-2024-0017
Mots clés
© 2024 Katarzyna Sałach-Dróżdż, published by Sciendo
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Figure 1.

Happiness (left panel) and life satisfaction (right panel): no country fixed effects. Notes: Figures show average marginal effects from ordered probit models for the probability of being very happy (left) and very satisfied with life (right). Year fixed effects are included, country fixed effects are not.
Happiness (left panel) and life satisfaction (right panel): no country fixed effects. Notes: Figures show average marginal effects from ordered probit models for the probability of being very happy (left) and very satisfied with life (right). Year fixed effects are included, country fixed effects are not.

Figure 2.

Happiness (left panel) and life satisfaction (right panel): no year fixed effects. Notes: Figure shows average marginal effects from ordered probit models for the probability of being very happy (left) and very satisfied with life (right). Country fixed effects are included, year fixed effects are not.
Happiness (left panel) and life satisfaction (right panel): no year fixed effects. Notes: Figure shows average marginal effects from ordered probit models for the probability of being very happy (left) and very satisfied with life (right). Country fixed effects are included, year fixed effects are not.

Average marginal effects from the ordered probit model for the probability of being very happy or being very satisfied with life.

Happiness Life satisfaction
(1) (2) (3) (4) (5) (6) (7) (8)
Wealth: Bottom 50% –0.006 0.001
Wealth: Middle 40% (0.005) –0.006** (0.003)
–0.003*
Wealth: Top 10% (0.003) 0.004** (0.002) 0.001
Wealth: Top 1% (0.002) 0.004**(0.002) (0.001) 0.002**(0.001)
Observations 256,164 256,164 256,164 256,164 256,588 256,588 256,588 256,588
Countries 57 57 57 57 57 57 57 57
Pseudo-R2 0.130 0.131 0.131 0.131 0.068 0.068 0.068 0.068

Average marginal effects from the ordered probit model for the probability of being very happy or being very satisfied with life: “rich” countries.

Happiness Life satisfaction
(1) (2) (3) (4) (5) (6) (7) (8)
Wealth: Bottom 50% –0.005 0.006***
Wealth: Middle 40% (0.005) 0.003 (0.002) 0.000
Wealth: Top 10% (0.003) –0.003 (0.003) –0.001
Wealth: Top 1% (0.002) –0.002(0.002) (0.002) 0.000(0.002)
Observations 122,235 122,235 122,235 122,235 122,484 122,484 122,484 122,484
Countries 35 35 35 35 35 35 35 35
Pseudo-R2 0.137 0.137 0.137 0.137 0.065 0.065 0.065 0.065

Average marginal effects from the ordered probit model for the probability of being very happy or being very satisfied with life:“poor”countries

Happiness Life satisfaction
(1) (2) (3) (4) (5) (6) (7) (8)
Wealth: Bottom 50% −0.017*** −0.005
Wealth: Middle 40% (0.006) −0.010*** (0.005) −0.006**
Wealth: Top 10% (0.003) 0.007** (0.003) 0.004*
Wealth: Top 1% (0.002) 0.006**(0.002) (0.002) 0.004***(0.002)
Observations 133,929 133,929 133,929 133,929 134,104 134,104 134,104 134,104
Countries 29 29 29 29 29 29 29 29
Pseudo-R2 0.123 0.124 0.124 0.123 0.064 0.065 0.065 0.065

Descriptive statistics:Inequality measures.

Countries Mean Std. Dev. Min. Max.
Pre-tax income:Bottom 50% 59 17.28 5.31 6.18 26.36
Pre-tax income:Middle 40% 59 42.49 5.11 29.29 52.81
Pre-tax income:Top 10% 59 40.22 9.79 27.47 63.62
Pre-tax income:Top 1% 59 13.83 5.09 6.61 28.61
Post-tax income:Bottom 50% 41 24.19 6.90 8.10 34.83
Post-tax income:Middle 40% 41 43.48 5.01 29.53 53.75
Post-tax income:Top 10% 42 32.33 10.60 22.08 60.69
Post-tax income:Top 1% 42 9.91 5.14 4.92 24.36
Wealth:Bottom 50% 58 3.91 2.76 −2.77 11.76
Wealth:Middle 40% 58 34.58 6.68 16.88 46.17
Wealth:Top 10% 58 61.51 8.62 43.94 85.89
Wealth:Top 1% 58 28.08 9.15 13.84 52.35

The list of countries and the number of observations included in the regressions

Number of observations
Country Table 2: Pre-tax income Table 3: Bottom 50% and Middle 40% of Post-tax income Table 3: Top 10% and Top 1% of Post-tax income Table 4: Wealth Table 5: Low- and middle-income economies Table 6: High-income economies
Argentina 2,833 766 766 2,833 2,067 766
Australia 5,611 5,611 5,611 5,611 0 5,611
Austria 2,502 2,502 2,502 2,502 0 2,502
Belgium 1,342 1,342 1,342 1,342 0 1,342
Brazil 7,133 4,402 4,402 5,492 5,492 0
Bulgaria 4,078 4,078 4,078 4,078 4,078 0
Canada 7,419 0 3,422 7,419 0 7,419
Chile 4,638 3,736 3,736 4,638 2,930 1,708
China 6,959 0 0 6,959 6,959 0
Colombia 5,929 2,961 2,961 5,929 5,929 0
Croatia 2,396 2,396 2,396 2,396 0 2,396
Cyprus 3,635 3,635 3,635 3,635 0 3,635
Czech Republic 3,392 3,392 3,392 3,392 865 2,527
Denmark 4,104 4,104 4,104 4,104 0 4,104
Dominican Republic 296 0 0 296 296 0
Ecuador 2,306 2,306 2,306 2,306 2,306 0
Egypt 6,760 0 0 6,760 6,760 0
El Salvador 1,033 0 0 1,033 1,033 0
Estonia 4,715 4,715 4,715 4,715 923 3,792
Finland 3,685 3,685 3,685 3,685 0 3,685
France 3,882 3,882 3,882 3,882 0 3,882
Georgia 5,928 0 0 5,928 5,928 0
Germany 10,054 10,054 10,054 10,054 0 10,054
Greece 2,355 2,355 2,355 2,355 0 2,355
Hong Kong 3,057 0 0 0 0 0
Hungary 3,328 3,328 3,328 3,328 0 3,328
Iceland 2,119 2,119 2,119 2,119 0 2,119
India 10,028 0 0 8,311 8,311 0
Iraq 6,619 0 0 6,619 6,619 0
Ireland 515 515 515 515 0 515
Italy 3,074 3,074 3,074 3,074 0 3,074
Jordan 3,478 0 0 3,478 3,478 0
Korea 4,784 0 0 4,784 0 4,784
Latvia 2,236 2,236 2,236 2,236 2,236 0
Lebanon 2,300 0 0 2,300 2,300 0
Lithuania 2,961 2,961 2,961 2,961 1,935 1,026
Luxembourg 1,147 1,147 1,147 1,147 0 1,147
Mexico 7,239 4,925 4,925 7,239 7,239 0
Netherlands 5,446 5,446 5,446 5,446 0 5,446
New Zealand 3,032 0 0 3,032 0 3,032
Norway 4,006 4,006 4,006 4,006 0 4,006
Peru 6,205 5,280 5,280 6,205 6,205 0
Poland 3,842 3,842 3,842 3,842 1,914 1,928
Portugal 782 782 782 782 0 782
Romania 7,229 7,229 7,229 7,229 7,229 0
Russian Federation 9,197 0 0 9,197 9,197 0
Serbia 6,154 6,154 6,154 6,154 6,154 0
Singapore 3,587 0 0 3,587 0 3,587
Slovakia 2,813 2,813 2,813 2,813 861 1,952
Slovenia 3,430 3,430 3,430 3,430 0 3,430
South Africa 13,179 0 0 10,927 10,927 0
Spain 5,558 5,558 5,558 5,558 0 5,558
Sweden 4,824 4,824 4,824 4,824 0 4,824
Switzerland 5,637 5,637 5,637 5,637 0 5,637
Turkey 11,930 0 0 11,028 11,028 0
USA 6,991 6,991 6,991 6,991 0 6,991
United Kingdom 3,291 3,291 3,291 3,291 0 3,291
Uruguay 2,730 1,849 1,849 2,730 2,730 0
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