Inequality of Happiness : Evidence of the Compression of the Subjective - Well - Being Distribution with Economic Growth

The field of “Happiness Research” has grown markedly. A central question is whether higher income and/or economic growth rates are associated with higher levels of Subjective Well Being (SWB). Cross-sectional analysis clearly indicates that there is a positive relationship between income and SWB. However, in time series this relationship may vanish (the Easterlin Paradox). In this paper, we examine the relationship between income, economic growth, and SWB inequality using data from the World Values Survey and World Development Indicators. The results indicate that per capita income is inversely related to SWB inequality in cross-sectional analysis. There is also evidence that greater economic growth is associated with a greater decrease in SWB inequality. The relationship between income, economic growth, and SWB inequality is not explained by income inequality.