Life Satisfaction and Income Inequality
Do people care about income inequality and does income inequality affect subjective well-being? Welfare theories can predict either a positive or a negative impact of income inequality on subjective well-being and empirical research has found evidence on a positive, negative or non significant relation. This paper attempts to determine some of the possible causes of such empirical heterogeneity. Using a very large sample of world citizens, the author tests the consistency of income inequality in predicting life satisfaction. The analysis finds that income inequality has a negative and significant effect on life satisfaction. This result is robust to changes in regressors and estimation choices and also persists across different income groups and across different types of countries. However, this relation is easily obscured or reversed by multicollinearity generated by the use of country and year fixed effects. This is particularly true if the number of data points for inequality is small, which is a common feature of cross-country or longitudinal studies.
Saved in:
| id |
dig-okr-109863341 |
|---|---|
| record_format |
koha |
| spelling |
dig-okr-1098633412021-04-23T14:02:09Z Life Satisfaction and Income Inequality Verme, Paolo BENCHMARK CAP COUNTRY DUMMIES COUNTRY LEVEL CROSS-COUNTRY DATA CROSS-COUNTRY STUDIES CROSS-COUNTRY STUDY DATA SET DATA SETS DEPENDENT VARIABLE DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DISPOSABLE INCOME DISPOSABLE INCOMES ECONOMETRIC ANALYSIS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC INEQUALITY ECONOMIC OUTLOOK ECONOMIC RESEARCH ECONOMIC REVIEW ECONOMICS RESEARCH EMPIRICAL EVIDENCE EMPIRICAL FINDINGS EMPIRICAL LITERATURE EMPIRICAL MODELS EMPIRICAL RESEARCH EMPIRICAL RESULTS EMPIRICAL STUDIES EQUATIONS EXCHANGE RATES GDP GDP PER CAPITA GINI COEFFICIENT GINI INDEX GROSS INCOMES HETEROSKEDASTICITY HOUSEHOLD INCOME HOUSEHOLD SURVEYS IMPACT OF INEQUALITY INCOME INCOME DISTRIBUTION INCOME DISTRIBUTIONS INCOME EFFECT INCOME GROUPS INCOME INEQUALITY INCOME MEASURES INCOME SCALE INCOME TAXES INCOME VARIABLES INCOMES INCREASED INEQUALITY INCREASING INCOME INEQUALITY INDIVIDUAL COUNTRIES INDIVIDUAL INCOMES INEQUALITY AVERSION INEQUALITY AVERSION PARAMETER INEQUALITY DATA INEQUALITY INDEPENDENT INEQUALITY MEASURE INEQUALITY MEASURES INEQUALITY VARIABLES LABOUR MARKET LEARNING LIFE EXPECTANCY LONGITUDINAL DATA MEAN INCOME MEDIAN INCOME NATIONAL SURVEYS NEGATIVE IMPACT NEGATIVE SIGN NET EFFECT PAYROLL TAXES POLICY DISCUSSIONS POLICY RESEARCH POOR POOR COUNTRIES POOR PEOPLE POSITIVE CORRELATION POSITIVE EFFECT POVERTY LINE POVERTY REDUCTION POWER PARITY PSU PUBLIC ECONOMICS PUBLIC TRANSFERS PURCHASING POWER QUESTIONNAIRES REGIONAL LEVEL RELATIVE INCOME RELATIVE POSITION SAMPLE SIZE SIGNIFICANCE LEVEL SIGNIFICANT CORRELATION SIGNIFICANT EFFECT SOCIAL CAPITAL SOCIAL INDICATORS SOCIAL JUSTICE SOCIAL MOBILITY UNEMPLOYMENT WEALTH WELL-BEING Do people care about income inequality and does income inequality affect subjective well-being? Welfare theories can predict either a positive or a negative impact of income inequality on subjective well-being and empirical research has found evidence on a positive, negative or non significant relation. This paper attempts to determine some of the possible causes of such empirical heterogeneity. Using a very large sample of world citizens, the author tests the consistency of income inequality in predicting life satisfaction. The analysis finds that income inequality has a negative and significant effect on life satisfaction. This result is robust to changes in regressors and estimation choices and also persists across different income groups and across different types of countries. However, this relation is easily obscured or reversed by multicollinearity generated by the use of country and year fixed effects. This is particularly true if the number of data points for inequality is small, which is a common feature of cross-country or longitudinal studies. 2012-03-19T18:00:39Z 2012-03-19T18:00:39Z 2011-02-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110223133910 http://hdl.handle.net/10986/3341 English Policy Research working paper ; no. WPS 5574 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper The World Region The World Region |
| institution |
Banco Mundial |
| collection |
DSpace |
| country |
Estados Unidos |
| countrycode |
US |
| component |
Bibliográfico |
| access |
En linea |
| databasecode |
dig-okr |
| tag |
biblioteca |
| region |
America del Norte |
| libraryname |
Biblioteca del Banco Mundial |
| language |
English |
| topic |
BENCHMARK CAP COUNTRY DUMMIES COUNTRY LEVEL CROSS-COUNTRY DATA CROSS-COUNTRY STUDIES CROSS-COUNTRY STUDY DATA SET DATA SETS DEPENDENT VARIABLE DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DISPOSABLE INCOME DISPOSABLE INCOMES ECONOMETRIC ANALYSIS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC INEQUALITY ECONOMIC OUTLOOK ECONOMIC RESEARCH ECONOMIC REVIEW ECONOMICS RESEARCH EMPIRICAL EVIDENCE EMPIRICAL FINDINGS EMPIRICAL LITERATURE EMPIRICAL MODELS EMPIRICAL RESEARCH EMPIRICAL RESULTS EMPIRICAL STUDIES EQUATIONS EXCHANGE RATES GDP GDP PER CAPITA GINI COEFFICIENT GINI INDEX GROSS INCOMES HETEROSKEDASTICITY HOUSEHOLD INCOME HOUSEHOLD SURVEYS IMPACT OF INEQUALITY INCOME INCOME DISTRIBUTION INCOME DISTRIBUTIONS INCOME EFFECT INCOME GROUPS INCOME INEQUALITY INCOME MEASURES INCOME SCALE INCOME TAXES INCOME VARIABLES INCOMES INCREASED INEQUALITY INCREASING INCOME INEQUALITY INDIVIDUAL COUNTRIES INDIVIDUAL INCOMES INEQUALITY AVERSION INEQUALITY AVERSION PARAMETER INEQUALITY DATA INEQUALITY INDEPENDENT INEQUALITY MEASURE INEQUALITY MEASURES INEQUALITY VARIABLES LABOUR MARKET LEARNING LIFE EXPECTANCY LONGITUDINAL DATA MEAN INCOME MEDIAN INCOME NATIONAL SURVEYS NEGATIVE IMPACT NEGATIVE SIGN NET EFFECT PAYROLL TAXES POLICY DISCUSSIONS POLICY RESEARCH POOR POOR COUNTRIES POOR PEOPLE POSITIVE CORRELATION POSITIVE EFFECT POVERTY LINE POVERTY REDUCTION POWER PARITY PSU PUBLIC ECONOMICS PUBLIC TRANSFERS PURCHASING POWER QUESTIONNAIRES REGIONAL LEVEL RELATIVE INCOME RELATIVE POSITION SAMPLE SIZE SIGNIFICANCE LEVEL SIGNIFICANT CORRELATION SIGNIFICANT EFFECT SOCIAL CAPITAL SOCIAL INDICATORS SOCIAL JUSTICE SOCIAL MOBILITY UNEMPLOYMENT WEALTH WELL-BEING BENCHMARK CAP COUNTRY DUMMIES COUNTRY LEVEL CROSS-COUNTRY DATA CROSS-COUNTRY STUDIES CROSS-COUNTRY STUDY DATA SET DATA SETS DEPENDENT VARIABLE DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DISPOSABLE INCOME DISPOSABLE INCOMES ECONOMETRIC ANALYSIS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC INEQUALITY ECONOMIC OUTLOOK ECONOMIC RESEARCH ECONOMIC REVIEW ECONOMICS RESEARCH EMPIRICAL EVIDENCE EMPIRICAL FINDINGS EMPIRICAL LITERATURE EMPIRICAL MODELS EMPIRICAL RESEARCH EMPIRICAL RESULTS EMPIRICAL STUDIES EQUATIONS EXCHANGE RATES GDP GDP PER CAPITA GINI COEFFICIENT GINI INDEX GROSS INCOMES HETEROSKEDASTICITY HOUSEHOLD INCOME HOUSEHOLD SURVEYS IMPACT OF INEQUALITY INCOME INCOME DISTRIBUTION INCOME DISTRIBUTIONS INCOME EFFECT INCOME GROUPS INCOME INEQUALITY INCOME MEASURES INCOME SCALE INCOME TAXES INCOME VARIABLES INCOMES INCREASED INEQUALITY INCREASING INCOME INEQUALITY INDIVIDUAL COUNTRIES INDIVIDUAL INCOMES INEQUALITY AVERSION INEQUALITY AVERSION PARAMETER INEQUALITY DATA INEQUALITY INDEPENDENT INEQUALITY MEASURE INEQUALITY MEASURES INEQUALITY VARIABLES LABOUR MARKET LEARNING LIFE EXPECTANCY LONGITUDINAL DATA MEAN INCOME MEDIAN INCOME NATIONAL SURVEYS NEGATIVE IMPACT NEGATIVE SIGN NET EFFECT PAYROLL TAXES POLICY DISCUSSIONS POLICY RESEARCH POOR POOR COUNTRIES POOR PEOPLE POSITIVE CORRELATION POSITIVE EFFECT POVERTY LINE POVERTY REDUCTION POWER PARITY PSU PUBLIC ECONOMICS PUBLIC TRANSFERS PURCHASING POWER QUESTIONNAIRES REGIONAL LEVEL RELATIVE INCOME RELATIVE POSITION SAMPLE SIZE SIGNIFICANCE LEVEL SIGNIFICANT CORRELATION SIGNIFICANT EFFECT SOCIAL CAPITAL SOCIAL INDICATORS SOCIAL JUSTICE SOCIAL MOBILITY UNEMPLOYMENT WEALTH WELL-BEING |
| spellingShingle |
BENCHMARK CAP COUNTRY DUMMIES COUNTRY LEVEL CROSS-COUNTRY DATA CROSS-COUNTRY STUDIES CROSS-COUNTRY STUDY DATA SET DATA SETS DEPENDENT VARIABLE DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DISPOSABLE INCOME DISPOSABLE INCOMES ECONOMETRIC ANALYSIS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC INEQUALITY ECONOMIC OUTLOOK ECONOMIC RESEARCH ECONOMIC REVIEW ECONOMICS RESEARCH EMPIRICAL EVIDENCE EMPIRICAL FINDINGS EMPIRICAL LITERATURE EMPIRICAL MODELS EMPIRICAL RESEARCH EMPIRICAL RESULTS EMPIRICAL STUDIES EQUATIONS EXCHANGE RATES GDP GDP PER CAPITA GINI COEFFICIENT GINI INDEX GROSS INCOMES HETEROSKEDASTICITY HOUSEHOLD INCOME HOUSEHOLD SURVEYS IMPACT OF INEQUALITY INCOME INCOME DISTRIBUTION INCOME DISTRIBUTIONS INCOME EFFECT INCOME GROUPS INCOME INEQUALITY INCOME MEASURES INCOME SCALE INCOME TAXES INCOME VARIABLES INCOMES INCREASED INEQUALITY INCREASING INCOME INEQUALITY INDIVIDUAL COUNTRIES INDIVIDUAL INCOMES INEQUALITY AVERSION INEQUALITY AVERSION PARAMETER INEQUALITY DATA INEQUALITY INDEPENDENT INEQUALITY MEASURE INEQUALITY MEASURES INEQUALITY VARIABLES LABOUR MARKET LEARNING LIFE EXPECTANCY LONGITUDINAL DATA MEAN INCOME MEDIAN INCOME NATIONAL SURVEYS NEGATIVE IMPACT NEGATIVE SIGN NET EFFECT PAYROLL TAXES POLICY DISCUSSIONS POLICY RESEARCH POOR POOR COUNTRIES POOR PEOPLE POSITIVE CORRELATION POSITIVE EFFECT POVERTY LINE POVERTY REDUCTION POWER PARITY PSU PUBLIC ECONOMICS PUBLIC TRANSFERS PURCHASING POWER QUESTIONNAIRES REGIONAL LEVEL RELATIVE INCOME RELATIVE POSITION SAMPLE SIZE SIGNIFICANCE LEVEL SIGNIFICANT CORRELATION SIGNIFICANT EFFECT SOCIAL CAPITAL SOCIAL INDICATORS SOCIAL JUSTICE SOCIAL MOBILITY UNEMPLOYMENT WEALTH WELL-BEING BENCHMARK CAP COUNTRY DUMMIES COUNTRY LEVEL CROSS-COUNTRY DATA CROSS-COUNTRY STUDIES CROSS-COUNTRY STUDY DATA SET DATA SETS DEPENDENT VARIABLE DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DISPOSABLE INCOME DISPOSABLE INCOMES ECONOMETRIC ANALYSIS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC INEQUALITY ECONOMIC OUTLOOK ECONOMIC RESEARCH ECONOMIC REVIEW ECONOMICS RESEARCH EMPIRICAL EVIDENCE EMPIRICAL FINDINGS EMPIRICAL LITERATURE EMPIRICAL MODELS EMPIRICAL RESEARCH EMPIRICAL RESULTS EMPIRICAL STUDIES EQUATIONS EXCHANGE RATES GDP GDP PER CAPITA GINI COEFFICIENT GINI INDEX GROSS INCOMES HETEROSKEDASTICITY HOUSEHOLD INCOME HOUSEHOLD SURVEYS IMPACT OF INEQUALITY INCOME INCOME DISTRIBUTION INCOME DISTRIBUTIONS INCOME EFFECT INCOME GROUPS INCOME INEQUALITY INCOME MEASURES INCOME SCALE INCOME TAXES INCOME VARIABLES INCOMES INCREASED INEQUALITY INCREASING INCOME INEQUALITY INDIVIDUAL COUNTRIES INDIVIDUAL INCOMES INEQUALITY AVERSION INEQUALITY AVERSION PARAMETER INEQUALITY DATA INEQUALITY INDEPENDENT INEQUALITY MEASURE INEQUALITY MEASURES INEQUALITY VARIABLES LABOUR MARKET LEARNING LIFE EXPECTANCY LONGITUDINAL DATA MEAN INCOME MEDIAN INCOME NATIONAL SURVEYS NEGATIVE IMPACT NEGATIVE SIGN NET EFFECT PAYROLL TAXES POLICY DISCUSSIONS POLICY RESEARCH POOR POOR COUNTRIES POOR PEOPLE POSITIVE CORRELATION POSITIVE EFFECT POVERTY LINE POVERTY REDUCTION POWER PARITY PSU PUBLIC ECONOMICS PUBLIC TRANSFERS PURCHASING POWER QUESTIONNAIRES REGIONAL LEVEL RELATIVE INCOME RELATIVE POSITION SAMPLE SIZE SIGNIFICANCE LEVEL SIGNIFICANT CORRELATION SIGNIFICANT EFFECT SOCIAL CAPITAL SOCIAL INDICATORS SOCIAL JUSTICE SOCIAL MOBILITY UNEMPLOYMENT WEALTH WELL-BEING Verme, Paolo Life Satisfaction and Income Inequality |
| description |
Do people care about income inequality
and does income inequality affect subjective well-being?
Welfare theories can predict either a positive or a negative
impact of income inequality on subjective well-being and
empirical research has found evidence on a positive,
negative or non significant relation. This paper attempts to
determine some of the possible causes of such empirical
heterogeneity. Using a very large sample of world citizens,
the author tests the consistency of income inequality in
predicting life satisfaction. The analysis finds that income
inequality has a negative and significant effect on life
satisfaction. This result is robust to changes in regressors
and estimation choices and also persists across different
income groups and across different types of countries.
However, this relation is easily obscured or reversed by
multicollinearity generated by the use of country and year
fixed effects. This is particularly true if the number of
data points for inequality is small, which is a common
feature of cross-country or longitudinal studies. |
| format |
Publications & Research :: Policy Research Working Paper |
| topic_facet |
BENCHMARK CAP COUNTRY DUMMIES COUNTRY LEVEL CROSS-COUNTRY DATA CROSS-COUNTRY STUDIES CROSS-COUNTRY STUDY DATA SET DATA SETS DEPENDENT VARIABLE DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DISPOSABLE INCOME DISPOSABLE INCOMES ECONOMETRIC ANALYSIS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC INEQUALITY ECONOMIC OUTLOOK ECONOMIC RESEARCH ECONOMIC REVIEW ECONOMICS RESEARCH EMPIRICAL EVIDENCE EMPIRICAL FINDINGS EMPIRICAL LITERATURE EMPIRICAL MODELS EMPIRICAL RESEARCH EMPIRICAL RESULTS EMPIRICAL STUDIES EQUATIONS EXCHANGE RATES GDP GDP PER CAPITA GINI COEFFICIENT GINI INDEX GROSS INCOMES HETEROSKEDASTICITY HOUSEHOLD INCOME HOUSEHOLD SURVEYS IMPACT OF INEQUALITY INCOME INCOME DISTRIBUTION INCOME DISTRIBUTIONS INCOME EFFECT INCOME GROUPS INCOME INEQUALITY INCOME MEASURES INCOME SCALE INCOME TAXES INCOME VARIABLES INCOMES INCREASED INEQUALITY INCREASING INCOME INEQUALITY INDIVIDUAL COUNTRIES INDIVIDUAL INCOMES INEQUALITY AVERSION INEQUALITY AVERSION PARAMETER INEQUALITY DATA INEQUALITY INDEPENDENT INEQUALITY MEASURE INEQUALITY MEASURES INEQUALITY VARIABLES LABOUR MARKET LEARNING LIFE EXPECTANCY LONGITUDINAL DATA MEAN INCOME MEDIAN INCOME NATIONAL SURVEYS NEGATIVE IMPACT NEGATIVE SIGN NET EFFECT PAYROLL TAXES POLICY DISCUSSIONS POLICY RESEARCH POOR POOR COUNTRIES POOR PEOPLE POSITIVE CORRELATION POSITIVE EFFECT POVERTY LINE POVERTY REDUCTION POWER PARITY PSU PUBLIC ECONOMICS PUBLIC TRANSFERS PURCHASING POWER QUESTIONNAIRES REGIONAL LEVEL RELATIVE INCOME RELATIVE POSITION SAMPLE SIZE SIGNIFICANCE LEVEL SIGNIFICANT CORRELATION SIGNIFICANT EFFECT SOCIAL CAPITAL SOCIAL INDICATORS SOCIAL JUSTICE SOCIAL MOBILITY UNEMPLOYMENT WEALTH WELL-BEING |
| author |
Verme, Paolo |
| author_facet |
Verme, Paolo |
| author_sort |
Verme, Paolo |
| title |
Life Satisfaction and Income Inequality |
| title_short |
Life Satisfaction and Income Inequality |
| title_full |
Life Satisfaction and Income Inequality |
| title_fullStr |
Life Satisfaction and Income Inequality |
| title_full_unstemmed |
Life Satisfaction and Income Inequality |
| title_sort |
life satisfaction and income inequality |
| publishDate |
2011-02-01 |
| url |
http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110223133910 http://hdl.handle.net/10986/3341 |
| work_keys_str_mv |
AT vermepaolo lifesatisfactionandincomeinequality |
| _version_ |
1756571331491528704 |