Inequality and happiness are europeans and americans different
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Inequality and Happiness: Are Europeans and Americans Different?. Alberto Alesina (Harvard), Rafael Di Tella (Harvard), and Robert MacCulloch (London School of Economics) National Bureau of Economic Research, April 2001 By: Michelle Rava . Research Topics.

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Inequality and Happiness: Are Europeans and Americans Different?

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Inequality and happiness are europeans and americans different

Inequality and Happiness: Are Europeans and Americans Different?

Alberto Alesina (Harvard), Rafael Di Tella (Harvard),

and Robert MacCulloch (London School of Economics)

National Bureau of Economic Research, April 2001

By: Michelle Rava


Research topics

Research Topics

  • The study is a crossroads of the study of determinates of happiness and of preferences for redistribution of wealth.

    • Rich/Poor

    • Left/Right

    • Does one group innately prefer more equal societies?

    • What role does social mobility play in the effect of inequality on happiness?

      • It would make sense for the poor to favor redistribution more strongly than the rich; however, “the poor of today may become the rich of tomorrow and they may not want to be in the future the ones who will support redistributive schemes.”


Methods

Methods

  • United States

    • Happiness

      • United States General Social Survey (1972-1994)

      • Taken all together, how would you say things are these days-would you say you are very happy, pretty happy, or not too happy?

    • Preference for Redistribution

      • Gini coefficients of gross family income for each state from the US Census Bureau

  • Europe

    • Happiness

      • The Euro-Barometer Survey Series (1975-1992)

      • Taking all things together, how would you say things are these days-would you say you’re very happy, fairly happy, or not too happy these days?

      • On the whole are you very satisfied, fairly satisfied, not very satisfied or not at all satisfied with the life you lead?

    • Preference for Redistribution

      • Gini coefficients from the Deininger and Squire 1996 data set


Empirical analysis

Empirical Analysis

  • Happygist is the answer given by an individual who lives in a certain state and year. g=whole sample, and can also be divided on the basis of other variables being studied.

  • MACROst refers to a set of variables at the state level that have previously been found to affect individual happiness

  • MICROgst refers to a set of personal characteristics that impact individual happiness

  • Others are dummy variables for year, error term and cross sectional units


United states

United States

  • Money does bring happiness

  • Education brings happiness

  • Right wing respondents were unaffected by inequality, while left leaning respondents show an inverse effect between happiness and inequality

  • The happiness of the poor seems unaffected by inequality; yet, the rich show a small effect of increased unhappiness

  • “…if there is an overall small effect of inequality in the US it comes from the leftist and rich voters.”


Europe

Europe

  • The left shows a strong aversion to inequality, while data for the right was insignificant.

  • While the happiness of the poor is strongly affected by inequality, the rich are not affected.


Data comparison

Data Comparison


Conclusions

Conclusions

  • There is a significant negative effect of inequality on happiness in Europe but not in the US

  • Leftist and poor Europeans exhibit a strong aversion to inequality; however, none of the political or socioeconomic groups examined in the US displayed an an aversion.

  • There are more opportunities for social mobility in the US than in Europe.


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