HOW DO EUROPEANS EVALUATE INCOME DISTRIBUTIONS? AN ASSESSMENT BASED ON HAPPINESS SURVEYS

Authors


  • Note: We thank Georg Tillmann and two anonymous referees for helpful comments.

*Udo Ebert, Department of Economics, University of Oldenburg, D-26111 Oldenburg, Germany (ebert@uni-oldenburg.de).

Abstract

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.

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