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Inequality and Happiness: Are Europeans and Americans Different?


Alberto F. Alesina


Harvard University - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Rafael Di Tella


Harvard Business School - Business, Government and the International Economy Unit; National Bureau of Economic Research (NBER)

Robert MacCulloch


Imperial College London - Tanaka Business School

June 2002

Harvard Institute of Economic Research Paper No. 1938

Abstract:     
We study the effect of the level of inequality in society on individual well being using a total of 123,668 answers to a survey question about ?happiness?. We find that individuals have a lower tendency to report themselves happy when inequality is high, even after controlling for individual income, a large set of personal characteristics, and year and country (or, in the case of the US, state) dummies. The effect, however, appears to be stronger in Europe than in the US. In addition we find a striking difference across groups. In Europe, the poor and those on the left of the political spectrum are unhappy about inequality; whereas in the US the happiness of the poor and of those on the left is uncorrelated with inequality. Interestingly, in the US it is the rich who are especially bothered by inequality. We argue that these findings are consistent with the perception (not necessarily the reality) that Americans have of living in a mobile society, where individual effort can move people up and down the income ladder, while Europeans believe that they live in less mobile societies.

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Date posted: December 14, 2001  

Suggested Citation

Alesina, Alberto F. and Di Tella, Rafael and MacCulloch, Robert, Inequality and Happiness: Are Europeans and Americans Different? (June 2002). Harvard Institute of Economic Research Paper No. 1938. Available at SSRN: http://ssrn.com/abstract=293781 or http://dx.doi.org/10.2139/ssrn.293781

Contact Information

Alberto F. Alesina (Contact Author)
Harvard University - Department of Economics ( email )
Littauer Center
Cambridge, MA 02138
United States
617-495-8388 (Phone)
617-495-7730 (Fax)
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Rafael Di Tella
Harvard Business School - Business, Government and the International Economy Unit ( email )
Cambridge, MA
United States
617-495-5048 (Phone)
617-496-5985 (Fax)
HOME PAGE: http://www.people.hbs.edu/rditella/
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Robert MacCulloch
Imperial College London - Tanaka Business School ( email )
South Kensington Campus
Exhibition Road
London SW7 2AZ, DC SW7 2AZ
United Kingdom
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