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Life satisfaction in China and consumption and income inequalities

Author

Listed:
  • Xiaoyan Lei

    (Peking University)

  • Yan Shen

    (Peking University)

  • James P. Smith

    (RAND Corporation)

  • Guangsu Zhou

    (Nankai University)

Abstract

This research uses nationally representative data to study how economic resources and inequalities are associated with life satisfaction of Chinese residents. We construct economic resource and inequality measures from expenditure rather than from income, after confirming that expenditure inequality is a better measure in the Chinese context. We find that economic inequalities in general are negatively associated with life satisfaction, and that this association is larger for inequalities in the lower half of the distribution than those in the upper half of the distribution. We further explore the mechanisms under which inequality can be associated with life satisfaction, and find that aspiration is potentially one important channel.

Suggested Citation

  • Xiaoyan Lei & Yan Shen & James P. Smith & Guangsu Zhou, 2018. "Life satisfaction in China and consumption and income inequalities," Review of Economics of the Household, Springer, vol. 16(1), pages 75-95, March.
    • Handle: RePEc:kap:reveho:v:16:y:2018:i:1:d:10.1007_s11150-017-9386-9
    DOI: 10.1007/s11150-017-9386-9
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    More about this item

    Keywords

    Economic inequality; Subjective well-being; Economic status; China;
    All these keywords.

    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

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