ncome Inequality and Happiness: A Meta-Analysis
|Author:||Mgr. Lucie Kamenická|
|Year:||2021 - summer|
|Leaders:|| doc. PhDr. Zuzana Havránková Ph.D.
|Work type:|| Finance, Financial Markets and Banking
|Awards and prizes:|
|Abstract:||The relationship between income inequality and happiness is central to a host
of welfare policies. If higher income inequality puts people down, advocating
for income redistribution from the rich to the poor could make society happier.
We show, however, that this popular consensus on the relationship’s direction
is rather absent in the academic literature. Based on the 868 observations collected from 53 studies and controlling for 62 aspects of study design, we use
state-of-the-art meta-analysis techniques to identify several important drivers
of the efect. Unless each study gets the same weight, the literature is driven by
publication bias pushing the estimates against the popular consensus. While
geographical diferences dominate among the systematic infuences of the relationship’s magnitude, the relationship is also strongly afected by various
methods and data the authors use in the primary studies. Most prominently,
it matters if authors control for diferent individual’s characteristics, such as
perceived trust in people or their health status.