TY  - JOUR
AU  - Alesina,Alberto
AU  - Tella,Rafael Di
AU  - MacCulloch,Robert
TI  - Inequality and Happiness: Are Europeans and Americans Different?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8198
PY  - 2001
Y2  - April 2001
UR  - http://www.nber.org/papers/w8198
L1  - http://www.nber.org/papers/w8198.pdf
N1  - Author contact info:
Alberto F. Alesina
Department of Economics
Harvard University
Littauer Center 210
Cambridge, MA 02138
Tel: 617/495-8388
Fax: 617/495-7730
E-Mail: aalesina@harvard.edu

Rafael Di Tella
Harvard Business School
Soldiers Field Rd
Boston, MA 02163
Tel: 617/495-6000
E-Mail: rditella@hbs.edu

Robert MacCulloch
The Business School
Imperial College London
South Kensington Campus
London SW7 2AZ
United Kingdom
Tel: +44 (0)20 7594157
Fax: +44 (0)20 7823 7685
E-Mail: r.macculloch@imperial.ac.uk
AB  - The answer to the question posed in the title is 'yes.' Using a total of 128,106 answers to a survey question about  happiness,' we find that there is a large, negative and significant effect of inequality on happiness in Europe but not in the US.  There are two potential explanations.  First, Europeans prefer more equal societies (inequality belongs in the utility function for Europeans but not for Americans).  Second, social mobility is (or is perceived to be) higher in the US so being poor is not seen as affecting future income.  We test these hypotheses by partitioning the sample across income and ideological lines. There is evidence of  inequality generated' unhappiness in the US only for a sub-group of rich leftists.  In Europe inequality makes the poor unhappy, as well as the leftists.  This favors the hypothesis that inequality affects European happiness because of their lower social mobility (since no preference for equality exists amongst the rich or the right).  The results help explain the greater popular demand for government to fight inequality in Europe relative to the US.
ER  -