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HOW DO EUROPEANS EVALUATE INCOME DISTRIBUTIONS? AN ASSESSMENT BASED ON HAPPINESS SURVEYS
Author(s) -
Ebert Udo,
Welsch Heinz
Publication year - 2009
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/j.1475-4991.2009.00347.x
Subject(s) - economics , happiness , inequality , income inequality metrics , economic inequality , welfare , income distribution , social welfare function , econometrics , demographic economics , measure (data warehouse) , inequity aversion , public economics , mathematics , psychology , social psychology , mathematical analysis , database , computer science , market economy
The purpose of this paper is to measure the evaluation of income inequality by European citizens. Starting from the concept of a social welfare function defined on income distributions the paper estimates the degree and nature of inequality aversion of Europeans. It uses subjective well‐being (SWB) as an empirical measure of welfare and estimates how SWB is related to average income and measures of income inequality (from an appropriate class). The estimated relationship is used to determine those inequality measures which qualify as proper representations of people's inequality aversion.