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The Relationship between Subjective Wellbeing and Subjective Wellbeing Inequality: Taking Ordinality and Skewness Seriously

Author

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  • Grimes, Arthur

    (Motu Economic and Public Policy Research Trust)

  • Jenkins, Stephen P.

    (London School of Economics)

  • Tranquilli, Florencia

    (Motu Economic and Public Policy Research Trust)

Abstract

We argue that the relationship between individual satisfaction with life (SWL) and SWL inequality is more complex than described by leading earlier research such as Goff, Helliwell, and Mayraz (Economic Inquiry, 2018). Using inequality indices appropriate for ordinal data, our analysis using the World Values Survey reveals that skewness of the SWL distribution, not only inequality, matters for individual SWL outcomes; so too does whether we look upwards or downwards at the (skewed) distribution. Our results are consistent with there being negative (positive) externalities for an individual's SWL from seeing people who are low (high) in the SWL distribution.

Suggested Citation

  • Grimes, Arthur & Jenkins, Stephen P. & Tranquilli, Florencia, 2020. "The Relationship between Subjective Wellbeing and Subjective Wellbeing Inequality: Taking Ordinality and Skewness Seriously," IZA Discussion Papers 13692, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp13692
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    References listed on IDEAS

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    1. Stephen P. Jenkins, 2020. "Better off? Distributional comparisons for ordinal data about personal well-being," New Zealand Economic Papers, Taylor & Francis Journals, vol. 54(3), pages 211-238, September.
    2. David M Kaplan & Wei Zhao, 2023. "Comparing latent inequality with ordinal data," The Econometrics Journal, Royal Economic Society, vol. 26(2), pages 189-214.
    3. Abul Naga, Ramses H. & Yalcin, Tarik, 2008. "Inequality measurement for ordered response health data," Journal of Health Economics, Elsevier, vol. 27(6), pages 1614-1625, December.
    4. Benedicte Apouey, 2007. "Measuring health polarization with self‐assessed health data," Health Economics, John Wiley & Sons, Ltd., vol. 16(9), pages 875-894, September.
    5. Ravallion, Martin & Lokshin, Michael, 2000. "Who wants to redistribute?: The tunnel effect in 1990s Russia," Journal of Public Economics, Elsevier, vol. 76(1), pages 87-104, April.
    6. Betsey Stevenson & Justin Wolfers, 2008. "Happiness Inequality in the United States," The Journal of Legal Studies, University of Chicago Press, vol. 37(S2), pages 33-79, June.
    7. Allison, R. Andrew & Foster, James E., 2004. "Measuring health inequality using qualitative data," Journal of Health Economics, Elsevier, vol. 23(3), pages 505-524, May.
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    Cited by:

    1. Pascarn R. Dickinson & Philip S. Morrison, 2022. "Aversion to Local Wellbeing Inequality is Moderated by Social Engagement and Sense of Community," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 159(3), pages 907-926, February.

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    More about this item

    Keywords

    skewness; subjective wellbeing; ordinal data; inequality; WVS;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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