The Great Happiness Moderation

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in SOEPpapers on Multidisciplinary Panel Data Research at DIW BerlinThis series presents research findings based either directly on data from the German SocioEconomic Panel Study (SOEP) or using SOEP data as part of an internationally comparable data set (e.g. CNEF, ECHP, LIS, LWS, CHER/PACO). SOEP is a truly multidisciplinary household panel study covering a wide range of social and behavioral sciences: economics, sociology, psychology, survey methodology, econometrics and applied statistics, educational science, political science, public health, behavioral genetics, demography, geography, and sport science.The decision to publish a submission in SOEPpapers is made by a board of editors chosen by the DIW Berlin to represent the wide range of disciplines covered by SOEP. There is no external referee process and papers are either accepted or rejected without revision. Papers appear in this series as works in progress and may also appear elsewhere. They often represent preliminary studies and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be requested from the author directly.Any opinions expressed in this series are those of the author(s) and not those of DIW Berlin.Research disseminated by DIW Berlin may include views on public policy issues, but the institute itself takes no institutional policy positions. AbstractThis paper shows that within-country happiness inequality has fallen in the majority of countries that have experienced positive income growth over the last forty years, in particular in developed countries. This new stylized fact comes as an addition to the Easterlin paradox, which states that the time trend in average happiness is flat during episodes of long-run income growth. This mean-preserving declining spread in happiness comes about via falls in both the share of individuals who declare low and high levels of happiness. Rising income inequality moderates the fall in happiness inequality, and may even reverse it after some point, for example in the US starting in the 1990s. Hence, if raising the income of all does not raise the happiness of all, it will at least harmonize the happiness of all, providing that income inequality does not grow too much. Behind the veil of ignorance, lower happiness inequality would certainly be considered as attractive by risk-averse individuals.

The drivers of happiness inequality: suggestions for promoting social cohesion

“…Fourth, the increase in income inequality in Germany cannot be considered as a driver of the increase in inequality, confirming the findings of Stevenson and Wolfers (2008), while the increase in average income entails a reduction in the dispersion of happiness, consistently with recent evidence provided by Clark et al (2012).…”

“…9 As observed above, a similar trend in the same time period is observed in the US by Stevenson and Wolfers (2008). It is also worth noting that, according to the World Database of Happiness, in most developed countries happiness inequality has decreased (see also Clark et al, 2012). In such a framework, the German case represents a peculiar and interesting case to study.…”

“…It is important to stress that while the related literature focuses on the analysis of "happiness inequality", GSOEP data report individuals' life satisfaction, a concept closely related but not identical to happiness. Note, however, that in the literature the two terms are often used as synonyms and results on their determinants are substantially the same (see for instance Clark et al, 2012). 8 Note that there is evidence of a significant drop in self reported life satisfaction as an individual is in the panel for a long period (Frijters and Beatton, 2008 Table A1, in Appendix, provides definitions of the covariates, while Table 1 reports covariates' mean values in the two considered time periods.…”

Online Networks and Subjective Well‐Being

“…The fact that researchers can trust the information from self-reported assessments of well-being allowed a burgeoning body of research that involved many social sciences, including economics. For example, happiness measures have been adopted in macro-and micro-economics (see, for instance, Di Tella and MacCulloch, 2006;Di Tella et al, 2003 and in empirical literature 6 in the fields of poverty, unemployment and inequality (Diener et al, 2009;Clark et al, 2012Clark et al, , 2013. Our indicator of subjective well-being has also been extensively used in relation to non-economic aspects such as aging, gender issues, marital and employment status, childbearing as well as to the quality of political institutions (Frey and Stutzer, 2002;Powdthavee, 2007;Stutzer and Frey, 2012).…”

Adaptation and the Easterlin Paradox

“…Easterlin's time-series analyses have been replicated a number of times (some recent flat happiness time series in growing countries appear in Clark et al, 2014b), although other work has suggested a positive time-series correlation between per capita GDP and average subjective well-being in at least some countries (see Stevenson and Wolfers, 2008).…”