Values, Inequality and Happiness
41 Pages Posted: 7 Jul 2008
Date Written: July 7, 2008
This paper examines the relationship between inequality and happiness through the lens of heterogeneous values, beliefs and inclinations. Drawing upon opinion data from the European Social Survey for twenty-three countries, we find that individual views on a wide range of themes can be effectively summarized by two orthogonal dimensions: moderation and inclusiveness. The former is defined as a tendency to take mild stands on issues rather than extreme ones; the latter is defined as the degree of support for a social model that grants equal rights to everyone who willingly subscribes to a shared set of rules, regardless of background and circumstances. These traits matter when it comes to how inequality affects subjective well-being; specifically, those who are either more moderate or more inclusive than their average compatriots prefer lower levels of inequality. In the case of moderation, inequality aversion can be read in terms of a desire for stability: people who are reluctant to take strong stands are especially wary of conflict, tension and unrest, which often go hand-in-hand with disparities. In the case of inclusiveness, the main element at play is likely to be distress accruing on a perception of unfairness.
Keywords: happiness, inequality, heterogeneity
JEL Classification: D31, D63
Suggested Citation: Suggested Citation