Are People Inequality Averse, and Do They Prefer Redistribution by the State? A Revised Version

Schwarze, Johannes; Härpfer, Marco

doi:10.2139/ssrn.487413

Cited by 8 publications

(2 citation statements)

References 27 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…While economic theory is based on utility‐maximizing behaviour, empirical economics has typically relied on revealed preferences to test the validity of competing theories. The strong appeal of life satisfaction data is that it can provide a direct proxy for utility, and recent studies have used this to establish, for example, the trade‐off between unemployment and inflation (Di Tella, MacCulloch, and Oswald 2001), the degree to which unemployment might be involuntary in nature (e.g., Clark and Oswald 1994, Winkelmann and Winkelmann 1998; Clark, Georgellis, and Sanfrey 2001; Kassenboehmer and Haisken‐DeNew 2009), the role of social norms in generating unemployment hysteresis (e.g., Clark 2003; Lalive and Stutzer 2004), the level of inequality‐aversion across the population (Schwarze and Härpfer 2007), and monetary equivalents for different types of health conditions (Ferrer‐i‐Carbonel and van Praag 2002; Frijters, Haisken‐DeNew, and Shields 2004a, b). There are also recent studies that have calculated the costs of terrorism, drought, and commuting using life satisfaction data (Carroll, Frijters, and Shields 2009; Frey, Luechinger, and Stutzer 2007; Stutzer and Frey 2008).…”

Section: Introductionmentioning

confidence: 99%

How well do individuals predict their future life satisfaction? Evidence from panel data following a nationwide exogenous shock

Frijters

Greenwell²,

Haisken‐DeNew

et al. 2009

Canadian J of Economics

View full text Add to dashboard Cite

Using German panel data, we investigate how well individuals predict their own future life satisfaction. The context is the decade following the 1990 reunification of Germany, which provided a large shock to the future prospects of the inhabitants of the former East Germany. We find that the majority of East Germans significantly overestimated the satisfaction gains from reunification in the years immediately after transition, but by 1994 had converged on correct aggregate expectations. Some evidence of microheterogeneity in the prediction errors is found by age and education. For West Germans, we find some initial over-optimism, although less than for East Germans. JEL classification: C23, C25, I31, Z1Avec quelle exactitude les individus prédisent-ils leur satisfaction future dans la vie? Résultats de données de panelà la suite d'un choc exogène d'envergure nationale. Les auteurs examinent avec quelle exactitude les individus prédisent leur propre satisfaction future dans la vieà l'aide de données de panel. Le contexte est la décennie qui a suivi la réunification de l'Allemagne en 1990 -réunification qui a produit un grand choc dans les perspectives d'avenir des habitants de l'ancienne Allemagne de l'Est. On découvre que la majorité des Allemands de l'Est ont surestimé de manière significative les gains de satisfactionà cause de la réunification dans les années qui ont suivi immédiatement la transition. Maisà partir de 1994, il y a eu convergence vers des expectatives agrégées plus réalistes. Les résultats montrent une certaine micro-hétérogénéité des erreurs de prévision selon l'âge et le niveau d'éducation. Pour les Allemands de l'Ouest, il y a eu sur-optimisme initialement, mais moins que pour les Allemands de l'Est.

show abstract

Section: Introductionmentioning

confidence: 99%

How well do individuals predict their future life satisfaction? Evidence from panel data following a nationwide exogenous shock

Frijters

Greenwell²,

Haisken‐DeNew

et al. 2009

Canadian J of Economics

View full text Add to dashboard Cite

show abstract

“…We thus contribute to the literature on income and its consequences for human welfare with a focus on subjective wellbeing (Alesina et al (2004); Clark (2003); Graham and Felton (2005); Hagerty (2000); Helliwell (2003); Morawetz et al (1977); Oishi et al (2011); Rozer and Kraaykamp (2013); Schwarze and Härpfer (2003); Senik (2004); Verme (2011); Zagorski et al (2014)). Papers investigating this link have produced controversial results indicating either a positive or a negative effect of income inequality on subjective wellbeing.…”

Section: Introductionmentioning

confidence: 99%

Does Income Class Affect Life Satisfaction? New Evidence from Cross-Country Microdata

et al. 2022

View full text Add to dashboard Cite

This paper analyzes the impact of income class on subjective wellbeing. Using rich data from the Gallup World Poll, we investigate whether belonging to locally (both country- and time-specific) defined income classes influences individuals’ life satisfaction. We rely on a latent class analysis estimation method, using individual income proxied by household income divided by household size, as an observable characteristic to hypothesize the income classes. We fit a model with one categorical latent variable with three unobserved groupings, here: income classes, which we interpret as lower, middle and upper classes. Our estimates suggest that individuals in the low and middle income classes are, respectively, about 30 and 17 percent of a standard deviation less likely to report a higher life satisfaction in comparison to individuals belonging to the upper income class. The effect of income classes remains robust to the inclusion of standard explanatory variables in this literature.

show abstract

The Subjective Well-Being Political Paradox: Evidence from Latin America

Macchia

Plagnol

2019

The Economics of Happiness

View full text Add to dashboard Cite

The subjective well-being political paradox describes the observation that individuals are on average more satisfied with their lives in welfare states than under right-leaning (conservative) governments, which are less likely to promote welfare policies; however, at the individual level, people who identify as leaning politically more to the right show higher levels of life satisfaction than those who describe themselves as leaning to the left. This subjective well-being political paradox has previously been observed in Europe. The present study investigates whether this paradox can also be found across 18 Latin American countries by using data from 9 waves of the Latinobarómetro survey. In addition to life satisfaction, we further consider respondents' self-rated ability to meet their financial needs in a satisfactory manner, which can be seen as a proxy for satisfaction with income. Latin America is an interesting region to study this question because of its political history and the emergence of left-leaning governments during the last fifteen years. We find that people report higher life satisfaction and a better ability to meet their financial needs under left-leaning governments compared to centre and right-leaning governments. In contrast, conservative individuals report higher financial and overall well-being than liberal individuals, which confirms the subjective well-being political paradox that was also found in Europe. Our analysis includes controls for macroeconomic indicators, such as inflation and unemployment rates and GDP per capita as well as socio-demographic factors.

show abstract

Are People Inequality Averse, and Do They Prefer Redistribution by the State? A Revised Version

Cited by 8 publications

References 27 publications

How well do individuals predict their future life satisfaction? Evidence from panel data following a nationwide exogenous shock

How well do individuals predict their future life satisfaction? Evidence from panel data following a nationwide exogenous shock

Does Income Class Affect Life Satisfaction? New Evidence from Cross-Country Microdata

The Subjective Well-Being Political Paradox: Evidence from Latin America

Contact Info

Product

Resources

About