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Income Inequality and Happiness: Is There a Relationship?

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  • Paul Alois

Abstract

This paper uses fixed effects regressions to examine the relationship between happiness and income inequality in 30 countries. It has three major findings. First, happiness and income inequality are correlated in the expected direction; high income inequality correlates with a smaller share of happy people and a higher share of unhappy people. Second, different regions have characteristics that strongly mediate the effect of income inequality on happiness. Third, the correlation between income inequality and happiness is of a similar magnitude to the correlation between median income and happiness.

Suggested Citation

  • Paul Alois, 2014. "Income Inequality and Happiness: Is There a Relationship?," LIS Working papers 614, LIS Cross-National Data Center in Luxembourg.
    • Handle: RePEc:lis:liswps:614
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    1. Lane Kenworthy, 2003. "An Equality-Growth Tradeoff?," LIS Working papers 362, LIS Cross-National Data Center in Luxembourg.
    2. Desai, Sonalde & Dubey, Amaresh & Joshi, Brij Lal & Sen, Mitali & Sharif, Abusaleh & Vanneman, Reeve, 2010. "Human Development in India: Challenges for a Society in Transition," OUP Catalogue, Oxford University Press, number 9780198065128.
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    Cited by:

    1. Frederico Cantante, 2020. "Four profiles of inequality and tax redistribution in Europe," Palgrave Communications, Palgrave Macmillan, vol. 7(1), pages 1-7, December.

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