title: On the relation between income inequality and happiness: Do fairness perceptions matter?
creator: Bjørnskov, Christian
creator: Dreher, Axel
creator: Fischer, Justina A. V.
creator: Schnellenbach, Jan
subject: 330
subject: 330 Economics
description: In this paper, we revisit the association between happiness and inequality. We argue that the perceived fairness of the income generation process affects this association. Building on a two-period model of individual life-time utility maximization, we predict that persons with higher perceived fairness will experience higher levels of life-time utility and are less in favor of income redistribution. In societies with a high level of actual social mobility, income inequality is perceived more positively with increased expected fairness. The opposite is expected for countries with low actual social mobility, due to an increasing relevance of a disappointment effect resulting from unsuccessful individual investments. Using the World Values Survey data and a broad set of fairness measures, we find strong support for the negative (positive) association between fairness perceptions and the demand for more equal incomes (subjective well-being). We also find strong empirical support for the disappointment effect in low social mobility countries. In contrast, the results for high-mobility countries turn out to be ambiguous.
date: 2010
type: Working paper
type: info:eu-repo/semantics/workingPaper
type: NonPeerReviewed
format: application/pdf
identifier: https://archiv.ub.uni-heidelberg.de/volltextserverhttps://archiv.ub.uni-heidelberg.de/volltextserver/10276/1/2009_Bjornskov_dp495.pdf
identifier: DOI:10.11588/heidok.00010276
identifier: urn:nbn:de:bsz:16-opus-102765
identifier:   Bjørnskov, Christian ; Dreher, Axel ; Fischer, Justina A. V. ; Schnellenbach, Jan  (2010) On the relation between income inequality and happiness: Do fairness perceptions matter?  [Working paper]     
relation: https://archiv.ub.uni-heidelberg.de/volltextserver/10276/
rights: info:eu-repo/semantics/openAccess
rights: http://archiv.ub.uni-heidelberg.de/volltextserver/help/license_urhg.html
language: eng