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Does Income Inequality Make Us Less Happy?
Author(s) -
Nguyen Jeremy K.,
Fleming Christopher M.,
Su JenJe
Publication year - 2015
Publication title -
australian economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.308
H-Index - 29
eISSN - 1467-8462
pISSN - 0004-9018
DOI - 10.1111/1467-8462.12083
Subject(s) - economics , inequality , demographic economics , economic inequality , life satisfaction , income inequality metrics , shadow (psychology) , sample (material) , income distribution , psychology , mathematics , mathematical analysis , chemistry , chromatography , psychotherapist
This article presents evidence from Australia showing linkages between income inequality in an individual ' s geographical region and life satisfaction. Higher income inequality is associated with lower self‐rated life satisfaction. In contrast to expectations that inequality may primarily be an issue of concern for poorer individuals, the relationship holds strongly for higher income households, but the evidence for lower income households is less conclusive. Shadow price estimates indicate that, in order to offset the effect of annual changes in inequality over the sample period (2001–2009), an average Australian would require compensatory changes of approximately 3–9 per cent in income each year (about $3,689 in 2009) .