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for helpful comments, our research assistant Shinpei Sano for expeditiously double-checking the empirical results, and Emma Chao for her energetic research assistance collecting the information on newspaper headlines and illustrations. The collection of the happiness data analyzed in this paper was financed by a Center of Excellence grant from the

Humans typically discount future gains more than losses. This phenomenon is referred to as the "sign effect" in experimental and behavioral economics. Although recent studies have reported associations between the sign effect and important social problems, such as obesity and incurring multiple debts, the biological basis for this phenomenon remains poorly understood. Here, we hypothesized that enhanced loss-related neural processing in magnitude and/or delay representation are causes of the sign effect. We examined participants performing intertemporal choice tasks involving future gains or losses and compared the brain activity of those who exhibited the sign effect and those who did not. When predicting future losses, significant differences were apparent between the two participant groups in terms of striatal activity representing delay length and in insular activity representing sensitivity to magnitude. Furthermore, participants with the sign effect exhibited a greater insular response to the magnitude of loss than to that of gain, and also a greater striatal response to the delay of loss than to that of gain. These findings may provide a new biological perspective for the development of novel treatments and preventive measures for social problems associated with the sign effect.

This paper analyses how consumption inequality within a fixed cohort grows with age using Japanese household microdata. Following the method developed by Deaton and Paxson (1994), we obtain the following results. First, consumption inequality starts to increase at the age of 40. Second, younger generations face a more unequal distribution from the beginning of their life‐cycle. Third, half of the rapid increase in the economy‐wide consumption inequality during the 1980s was caused by population aging, while one‐third was due to the increasing cohort effect. The paper compares the above results with those of Deaton and Paxson.

This paper analyzes income inequality, based on government income statistics and an attitude survey. First, the paper describes the present income inequality in Japan by using Gini coefficients, the income share of the top and bottom income classes, and mobilities among income classes. Second, by using the Japan–USA international survey, this paper analyzes the cause of the increasing awareness that Japan's income gap is widening. In these two countries, their distinct value judgments about the causes for the gap influence how they perceive it. The Japanese have negative perceptions about the income gap because they perceive it to be influenced by talent, academic background, or luck, and this perception seems relatively uncommon in the USA. A large percentage of Japanese also think one's income is decided by talent, academic background, or luck, although it should not be. Such disagreements between the desired and perceived determinants of income are thought to raise their negative perception of the gap.

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