Inequality and social rank: income increases buy more life satisfaction in more equal countries
How do income and income inequality combine to influence subjective well-being? We examined the relation between income and life satisfaction in different societies, and found large effects of income inequality within a society on the relationship between individuals’ incomes and their life satisfac...
| Main Authors: | , , , , |
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| Format: | Journal article |
| Language: | English |
| Published: |
SAGE Publications
2020
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| Summary: | How do income and income inequality combine to influence subjective well-being? We examined the relation between income and life satisfaction in different societies, and found large effects of income inequality within a society on the relationship between individuals’ incomes and their life satisfaction. The income–satisfaction gradient is steeper in countries with more equal income distributions, such that the positive effect of a 10% increase in income on life satisfaction is more than twice as large in a country with low income inequality as it is in a country with high income inequality. These findings are predicted by an income rank hypothesis according to which life satisfaction is derived from social rank. A fixed increment in income confers a greater increment in social position in a more equal society. Income inequality may influence people’s preferences, such that in unequal countries people’s life satisfaction is determined more strongly by their income. |
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