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Will wealth inequality decrease happiness?-Empirical evidence from China.

Jingtao Wang1

  • 1School of Advanced International Studies, Johns Hopkins University, Washington, DC, United States.

Frontiers in Psychology
|February 16, 2024
PubMed
Summary
This summary is machine-generated.

Wealth inequality significantly reduces happiness, especially for those with rural Hukou, lower education, or lower family income. Health and marital status mediate this effect, while social security and economic development can mitigate it.

Keywords:
ChinaKakwani indexhappinessrelative deprivationwealth inequality

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Area of Science:

  • Socioeconomic impacts
  • Health and well-being
  • Economic policy

Background:

  • Wealth inequality presents significant social and economic challenges.
  • Understanding the nuanced relationship between wealth distribution and subjective well-being is crucial.
  • Existing research often overlooks the micro-level impacts and mediating factors of wealth inequality on happiness.

Purpose of the Study:

  • To analyze the social and economic impacts of wealth inequality on happiness.
  • To investigate the mediating and moderating factors influencing this relationship.
  • To utilize micro survey data from the China Family Panel Studies (CFPS) for empirical analysis.

Main Methods:

  • Panel OLS regression with time and province fixed effects.
  • Heterogeneity analysis based on Hukou status, education, and family income.
  • Mediating and moderating effect tests to explore underlying mechanisms.

Main Results:

  • Wealth inequality significantly reduces happiness, confirmed by robustness checks.
  • The negative impact is less pronounced for individuals with urban Hukou, higher education, and higher per-member family income.
  • Health and marital status act as mediating factors, while social security expenditure and economic development moderate the effects.

Conclusions:

  • Wealth inequality negatively affects individual happiness through various micro and macro-level pathways.
  • Policy interventions focusing on social security and economic development can buffer the adverse effects of wealth inequality.
  • Relative deprivation is a more suitable metric for assessing wealth inequality's impact on happiness than absolute inequality.