Subjective Well-Being, Income, Economic
Development and Growth
Dan Sacks, Betsey Stevenson and Justin Wolfers
Wharton School, University of Pennsylvania and NBER
World Bank Workshop, NYU—October 8, 2010.
Subjective Well-being
 “Subjective well-being refers to all of the various types of
evaluations, both positive and negative, that people make of their
lives. It includes reflective cognitive evaluations, such as life
satisfaction and work satisfaction, interest and engagement, and
affective reactions to life events, such as joy and sadness.” (Diener,
2005)
 Typical questions:

Happiness
“Taking all things together, would you say you are: very happy; quite happy;
not very happy; not at all happy.”

Life satisfaction
“All things considered, how satisfied are you with your life as a whole these
days?” [1=Dissatisfied – 10=Satisfied]

Satisfaction ladder:
“Here is a ladder representing the ‘ladder of life’. Let's suppose the top of the
ladder represents the best possible life for you, and the bottom, the worse
possible life for you. On which step of the ladder do you feel you personally
stand at the present time? [0-10 steps].”
Sacks, Stevenson & Wolfers, Income and Happiness
3
Research Question: What is the Relationship Between
Subjective Well-being and Income?
Types of comparisons
1970s view
“Easterlin Paradox”
Within country:
Rich v. poor people in a
country
Big effects
1990s view
“Satiation”
New view:
Stevenson-Wolfers findings
results,
along with mounting
Big“My
effects
for income
Strong effects:
within≈0.35
<$15k from other time β
evidence
series
- But not for the rich
studies of subjective well-being, do on
GDP<$15k:
Strong
effects
balance
undermine the view
that
a
Strong effects
βbetween=0.35
focus onNoeconomic
growth is in the
GDP>$15k:
effects
best
interests of society.” Strong effects
No effects
Between country:
Rich v. poor countries
Statistically
insignificant effects
interpreted to be zero
National time series:
Country when rich v. poor
No effects
(Japan, USA, Europe)
International panel:
Countries with fast v. slow
growth
Largely unexamined
Largely unexamined
Strong effects
βpanel=0.35
Relative income
determines wellbeing
Relative income
determines wellbeing… once “basic
needs” are met”
There’s no paradox
(and never was)
De-emphasize
growth
Rich countries should
de-emphasize growth
and tax labor supply
Implications
Policy conclusions
– Richard Easterlin (2005)
(Available data are for
rich countries)
Sacks, Stevenson & Wolfers, Income and Happiness
βtime series=0.35
4
Research Question: What is the Relationship Between
Subjective Well-being and Income?
Types of comparisons
1970s view
“Easterlin Paradox”
1990s view
“Satiation”
Within country:
Rich v. poor people in a
country
Big effects
Big effects for income
<$15k
- But not for the rich
Between country:
Rich v. poor countries
Statistically
insignificant effects
interpreted to be zero
GDP<$15k:
Strong effects
GDP>$15k: No effects
National time series:
Country when rich v. poor
No effects
(Japan, USA, Europe)
No effects
(Available data are for
rich countries)
International panel:
Countries with fast v. slow
growth
Largely unexamined
Largely unexamined
Strong effects
βpanel=0.35
Relative income
determines wellbeing
Relative income
determines wellbeing… once “basic
needs” are met”
There’s no paradox
(and never was)
De-emphasize
growth
Rich countries should
de-emphasize growth
and tax labor supply
Implications
Policy conclusions
New view:
Stevenson-Wolfers findings
effects:
“once Strong
a country
has over
within
β
≈0.35
$15,000 per head, its
level of happiness
Strong effects
appears
to be
βbetween
=0.35
independent of its
income”
Strong effects
series=0.35
– Richard
(2003)
βtimeLayard
Sacks, Stevenson & Wolfers, Income and Happiness
5
Research Question: What is the Relationship Between
Subjective Well-being and Income?
Types of comparisons
1970s view
“Easterlin Paradox”
1990s view
“Satiation”
New view:
Stevenson-Wolfers
Within country:
Rich v. poor people in a
country
Big effects
Big effects for income
<$15k
- But not for the rich
Strong effects:
βwithin≈0.35
Between country:
Rich v. poor countries
Statistically
insignificant effects
interpreted to be zero
GDP<$15k:
Strong effects
GDP>$15k: No effects
Strong effects
βbetween≈0.35
National time series:
Country when rich v. poor
No effects
(Japan, USA, Europe)
No effects
(Available data are for
rich countries)
Strong effects
βtime series≈0.35
International panel:
Countries with fast v. slow
growth
Largely unexamined
Largely unexamined
Strong effects
βpanel≈0.35
Relative income
determines wellbeing
Relative income
determines wellbeing… once “basic
needs” are met”
There’s no paradox
(and never was)
De-emphasize
growth
Rich countries should
de-emphasize growth
and tax labor supply
Implications
Policy conclusions
Sacks, Stevenson & Wolfers, Income and Happiness
6
Why revisit the stylized facts?
1.
2.
Theoretical implications: Reference-dependent preferences
Yielding important policy implications (and big policy claims)
What explains our new findings?
1.
2.
3.
New data:

Longer time series (1946-2010);

More countries (n=140)
Statistical inference: Absence of evidence v. evidence of absence
What are “big” versus small effects?  Focus on the magnitudes
What we won’t do


Assess causality: Happiness = β log(Income)
Revisit what subjective well-being data “mean”
Sacks, Stevenson & Wolfers, Income and Happiness
7
Outline: Assessing the Happiness-Income link

Within-country cross-sectional comparisons



Between countries:





In past and current data
Multiple datasets
For both happiness and life satisfaction
No evidence of satiation
National Time Series and International Panels





USA
All countries
Japan
Europe
World Values Survey
USA
Newly-available measures of subjective well-being
Sacks, Stevenson & Wolfers, Income and Happiness
8
Within-Country Comparisons: USA
“Taken all together, how would you say things are these days?”
Family income
Very happy
Pretty happy
Not too happy
<$12,500 (bottom 10%)
21%
53%
26%
$12,500-$49,999
25%
61%
13%
$50,000-$149,999
40%
54%
6%
$150,000 (top 10%)
53%
45%
2%
Source: U.S. General Social Survey, 2006
“When we plot average happiness versus income for clusters of people in a given
country at a given time, we see that rich people are in fact much happier than poor
people. It’s actually an astonishingly large difference. There’s no one single change
you can imagine that would make your life improve on the happiness scale as much
as to move from the bottom 5 percent on the income scale to the top 5 percent.”
- Robert Frank (2005)
Sacks, Stevenson & Wolfers, Income and Happiness
9
Satisfaction and Log(Family Income)
Well-Being
8
Lowessand
fits forLog(Income)
the 25 Largest Countries; Gallup World Poll
USA
βwithin
7
6
5
4
3
≈ 0.35
Normalized satisfaction ladder score
1
GBR
MEX
ITAFRA
DEU
COL
BRA
IND THA
VNMTUR
IRN
RUS
PAK
UKR
CHN
EGY
PHL
BGDNGA
JPN
KOR
0
ETH
-.5
-1
Figure shows the central 90% of the income distribution for each country.
.5
1
2
4
8
16
32
64
Annual household income ($000s; Log income scale)
.5
128
Source: Daniel Sacks, Betsey Stevenson and Justin Wolfers (2010), “Subjective Well-Being, Income,
10
Sa
cks
Within-country : Rich are happier than poor
Without
controls
With
controls
Permanent
Income
Adjusted
0.422
IV
Sample size
Gallup World Poll:
Ladder question
0.236***
(0.014)
0.232***
(0.014)
0.449 ***
(0.027)
171,900
(126
Countries)
116,527
(61
Countries)
32,463
(43
Countries)
World Values Survey:
Life satisfaction
0.216***
(0.017)
0.227***
(0.037)
0.413
0.26***
(0.035)
Pew Global Attitudes
Survey: Ladder
question
0.281***
(0.027)
0.283***
(0.027)
0.515
0.393***
(0.033)
Notes: The table reports the coefficient on the log of household income, obtained from regressing standardized
life satisfaction against the log of household income and country fixed effects using the indicated data set.
Additional controls include a quartic in age, interacted with sex, plus indicators for age and sex missing. Our
permanent income adjustment is to scale up our estimates by 1/0.55; see text for explanation. We instrument for
income using full set of country×education fixed effects. We report robust standard errors, clustered at the country
level, in parentheses. For further details on the standardization of satisfaction and the exact wording of
satisfaction question, see the text. ***, ** and * denote statistically significant at 1%, 5% and 10%, respectively.
Sacks, Stevenson & Wolfers, Income and Happiness
11
Outline: Assessing the Happiness-Income link
 Within-country comparisons


USA
All countries
βwithin ≈ 0.35
 Between countries:




In past and current data
Multiple datasets
Both happiness and life satisfaction
No evidence of satiation
“the happiness differences between rich
and poor countries that one might
expect on the basis of the within country
differences by economic status are not
borne out by the international data.” –
Easterlin, (1974)
 National Time Series and International Panels




Japan
Europe
World Values Survey
USA
Sacks, Stevenson & Wolfers, Income and Happiness
12
Early Cross-National Studies of Well-Being and GDP
Gallup, 1946
(Happiness)
1.5
Tension Study, 1948
(Satisfaction)
Gallup, 1949
(Happiness)
1.0
NOR
AUS
USA
GBR
NLD
0.5
GBR
USA
USA
CAN
0.0
AUS
NLD
GBR
USA
CAN
NOR
MEX
ITA
DEU
-0.5
FRA
FRA
FRA
-1.0
y = -9.96+1.14*ln(x) [se=0.31]
Correlation=0.93
-1.5
.5
1
2
4
8
16 32
1.5 Patterns of Human Concerns, 1960
(Satisfaction ladder)
y = -4.11+0.49*ln(x) [se=0.23]
Correlation=0.63
.5
1
2
4
8
16
World Survey III, 1965
(happiness)
32
y = -9.46+1.08*ln(x) [se=0.60]
Correlation=0.63
.5
1
2
4
8
16
32
1.0
USA
CUB
0.5
GBRUSA
EGY
0.0
ISRDEU
JPN
YUG
PAN
BRA
POL
NGA
FRG
MYS
THA
PHL
FRA
IND
-0.5
βbetween ≈ 0.35
ITA
-1.0
y = -2.45+0.31*ln(x) [se=0.17]
DOM
Correlation=0.49
-1.5
.5
1
2
4
8
16
32
y = -1.60+0.17*ln(x) [se=0.15]
Correlation=0.41
.5
1
2
4
8
16
32
Real GDP per&capita
(thousands
of dollars,
log scale)
Sacks, Stevenson
Wolfers,
Income
and Happiness
13
βbetween ≈ 0.35
World Values Survey
1981-84 wave
9
1.0
DNK
ISL
SWE
MLTIRL AUS
NOR
CAN
NLD
USA
GBR
BEL
DEU
HUN
FRA
ITA
ESPJPN
8
7
1989-93 wave
9
CHE
MLT DNK
ISL
CAN
IRL SWE
AUT
NLD
USA0.5
NOR
FIN
BEL
GBR
BRA
ITA
ESP
PRT
DEU
KOR
SVKCZE FRA
POL
JPN 0.0
TUR
SVN
HUN
LTU
ROM EST
LVA
BLR RUS
-0.5
BGR
CHLMEX
ZAF
ARG
8
0.5
7
0.0
6
KOR
5
-0.5
ARG
-1.0
4
y = -4.07+0.46*ln(x) [se=0.22]
Correlation=0.57
3
.5
1
9
8
2
4
8
16
32
1994-99 wave
1.0
COL
PRI CHE
FIN
SWE
NZL
USA
0.5
NOR
GBR
AUS
SLV MEX
BRA
URY
DEU
CHNPHL VEN
JPN
ESP
NGA
TWN
IND
CZE
PERTUR POLSVN
HRV
SVK
HUN
MKD
SCG
ZAF
BIH
AZE
EST
LTU
LVA
ROM
BGD
CHL
ARG
GEO ALB DOM
BGR
RUS
BLR
ARM
UKR
MDA
7
6
5
4
y = -4.00+0.43*ln(x) [se=0.05]
Correlation=0.72
3
.5
1
-1.5
2
4
8
16
32
0.0
-0.5
Standardized satisfaction ladder score
6
5
NGA
1.0
CHN
IND
-1.0
4
y = -4.69+0.51*ln(x) [se=0.08]
Correlation=0.74
3
.5
1
7
6
5
-1.5
3
8
16
32
1.0
PRI
DNK
MEX MLT IRL
ISL LUX
AUT
FIN
NLD
CAN
USA 0.5
SWE
BEL
VEN
DEU
GBR
ARG
SAU
SVN
ITA
CHL CZE
SGP
ESP
ISR
PRT
IDN
FRA
NGA
GRC
PHL
VNM CHN
KGZ
JPN
PER
0.0
POL KOR
IRN HRV
MAR
SVK
EST
BGD
DZA
SCGBIHJOR
TURZAFHUN
UGA
BGR
LVA
IRQ
-0.5
ALBROM
IND
MKD
LTU
PAK EGY
BLR
RUS
MDA
UKR
8
4
4
1999-2004 wave
9
-1.0
2
-1.5
-1.0
ZWE
TZA
y = -2.88+0.32*ln(x) [se=0.04]
Correlation=0.72
.5
1
2
4
8
Real GDP per&Capita
(thousands
of dollars,
scale)
Sacks, Stevenson
Wolfers,
Income
andlog
Happiness
16
-1.5
32
14
9
Pew Global Attitudes Survey, 2002
1.5
8
Standardized satisfaction ladder score
βbetween ≈ 0.35
1.0
GTM
7
HND
VNM
6
UZB
NGA
EGY
IDN
BOL
CIV
SEN
PAK
5
4
KEN
MLI
IND
BGDGHA
KOR
VEN
BRA
PER
PHL
JOR
CHN
LBN
ARG
CZE
ITA
FRA
GBR
DEU
JPN
SVK
POL
ZAF
0.0
-0.5
BGR
y = -1.73+0.20*ln(x) [se=0.04]
Correlation=0.55
3
.5
1
0.5
UKR TURRUS
UGA AGO
TZA
CANUSA
MEX
2
4
8
Real GDP per capita (thousands of dollars, log scale)
16
Sacks, Stevenson & Wolfers, Income and Happiness
-1.0
32
15
9
7
6
5
4
1.5
βbetween ≈ 0.35
DNK
FIN
CHE
NLD
NZL CAN
N
OR
SWE
IRL
USA
AUS
CRI
BEL
ESPAUT
SAU
ISR GBR
VEN
FRA ARE
ITA
SGP
MEX
PRI
PAN
BRA
CZE DEU
GRC
CYP
JAM
ARG
TWN
MYS
GTM
COL
KWT JPN
JOR
LTU
THA CHL
TTO SVN
HRV
URY
POL
BLR
KAZ
KOR
HKG
BOL
SLV
CUB
PRT
VNM
EST
MMRUZB
RUS SVK
IRN
PAK HND
LAO
ROM
MNE
DOM
TUR
INDEGY
ZAF
UNK
BWA HUN
DZA
UKR
MAR
PER
ECU
PRY
IDN
MDA
LBN
GHA
BIH
NGA
LVA
PHL SRB
CHN
MOZ
NIC
KGZ
MRT
NPL
SEN
BGD
AZE
ALB
IRQ
ARMMKD
ZMB TJK
YEM
AGO
LKA
MWIMDG
MLI UGA
RWA
CMR
KEN
NER BEN
ETH
AFGTZA
BFA
BDI
KHMGEO
BGR
TCD
HTI
Standardized satisfaction ladder score
8
Gallup World Poll
SLE
TGO
1
0.5
0.0
-0.5
ZWE
y=-2.955+0.342*ln(x) [se=0.019] -1.0
Correlation=0.82
3
0.5
1.0
2
4
8
16
GDP per capita,
(thousands
of dollars,
scale)
Sacks,Real
Stevenson
& Wolfers,
Income
andlog
Happiness
32
16
Comparing Within and Between Country Estimates
9
Country-year aggregates
1.5
Within-country wellbeing gradient
Between-country wellbeing gradient
0.5
0.0
-0.5
DNK
FIN
CHE
NLD
NZLCAN
NOR
SWE
IRL
USA
AUS
CRI
BEL
ESPAUT
SAU
ISR GBR
VEN
FRA ARE
ITA
SGP
MEX
PRI
PAN
BRA
CZE DEU
GRC
CYP
JAM
ARG
TWN
MYS
GTM
COL
KWT JPN
JOR THA CHLLTU
TTO SVN
HRV
URY
POL
BLR
KAZ
KOR HKG
BOL
SLV
CUB
PRT
VNM
EST
MMR
UZB
RUS SVK
IRN
PAK HND
LAO
ROM
MNE
DOM
TUR
INDEGY DZA
UNK
BWA HUN
UKR ZAF
MAR
PER
ECU
PRY
IDN
MDA
LBN
GHA
BIH
NGA
LVA
PHL
SRB
CHN
MOZ
NIC
KGZ
MRT
NPL
SEN
BGD
AZE
ALB
ARM
ZMB TJK
YEM
AGO
LKA MKD
MWIMDG
MLI UGA
RWA
CMR
KEN
NER
ETH
AFG
TZA BEN
BFA
BDI
KHM
GEO
BGR
TCD
HTI
βbetween
-1.0
≈
SLE
.5
βwithin
TGO
1
≈ 0.35
Satisfaction ladder score (0-10)
1.0
8
ZWE
2
7
6
5
4
3
4
8
16
Real GDP per capita (thousands of dollars, log scale)
Sacks, Stevenson & Wolfers, Income and Happiness
32
18
Outline: Assessing the Happiness-Income link
 Within-country comparisons


βwithin ≈ 0.35
USA
All countries
 Between countries:




Through time
Multiple datasets
Both happiness and life satisfaction
No evidence of satiation
βbetween ≈ 0.35
 National Time Series and International Panels




Japan
Europe
World Values Survey
USA
“income growth in a society does not increase
happiness”. - Easterlin (1995)
Sacks, Stevenson & Wolfers, Income and Happiness
20
Happiness & Economic Growth: Time Series Evidence
 Japan


Old view: Life satisfaction flat, despite robust post-war growth
New view: Robust growth in life satisfaction
…apparent only when taking account of breaks in the data
 US


Old view: No increase in happiness since 1972 despite GDP growth
New view: True.
…but few sample participants experienced income growth
 Europe


Old view: No clear evidence of growing life satisfaction (1973-89)
New view: Extending data through 2007 yields clearly rising satisfaction
 Around the World


Old view: No clear evidence of growing life satisfaction
New view: Clear positive relationship between income and growth
… when comparing comparable samples
and Wolfers, Subjective Well-Being
Source: Betsey StevensonStevenson
and Justin Wolfers
(2010), “Time Series Evidence on the Well-Being Link” 21
Change in Life Satisfaction and Economic Growth in Europe
0.50
Belgium
Denmark
Greece
0.25
0.00
-0.25
-0.50
0.50
y = 2.53 + -0.25 * log(GDP) [se=0.14]
Correlation = -0.31
y = -3.63 + 0.36 * log(GDP) [se=0.05]
Correlation = 0.73
France
y = -2.05 + 0.21 * log(GDP) [se=0.10]
Correlation = 0.22
Ireland
Italy
0.25
0.00
-0.25
-0.50
0.50
y = -3.91 + 0.39 * log(GDP) [se=0.10]
Correlation = 0.63
y = -0.90 + 0.09 * log(GDP) [se=0.05]
Correlation = 0.30
Netherlands
y = -6.75 + 0.68 * log(GDP) [se=0.09]
Correlation = 0.81
United Kingdom
West Germany
0.25
0.00
-0.25
-0.50
8
time
series
β
y = -1.88 + 0.19 * log(GDP) [se=0.07]
Correlation = 0.41
16
≈ 0.35
32
y = -1.34 + 0.13 * log(GDP) [se=0.03]
Correlation = 0.48
8
16
32
y = -1.08 + 0.11 * log(GDP) [se=0.08]
Correlation = 0.19
8
Stevenson and Wolfers, Subjective Well-Being
Real GDP per capita (thousands of dollars, log scale)
16
32
26
0.4
International Panel Data: World Values Survey
βpanel ≈ 0.35
0.2
0.0
-0.2
y = 0.51*ln(x) [se=0.13]
Correlation=0.55
-0.4
-.5
-.25
0
.25
Sacks, Stevenson & Wolfers, Income and Happiness
Log GDP, relative to country and wave fixed effects
.5
28
Satisfaction and Growth: International Panel Regressions
World Values Survey
Eurobarometer
All Countries
Transition
Non-transition
All Countries
Countries
Countries
Panel A: Panel Regressions
𝑳𝒊𝒇𝒆 𝑺𝒂𝒕𝒊𝒔𝒇𝒂𝒄𝒕𝒊𝒐𝒏𝒄𝒕 = 𝜷 𝒍𝒐𝒈 𝑮𝑫𝑷𝒄𝒕 + 𝒄𝒐𝒖𝒏𝒕𝒓𝒚 𝒂𝒏𝒅 𝒘𝒂𝒗𝒆 𝒇𝒊𝒙𝒆𝒅 𝒆𝒇𝒇𝒆𝒄𝒕𝒔
ln(GDP)
0.505***
0.638**
0.407***
0.170**
(0.109)
(0.239)
(0.116)
(0.074)
N
166 observations 31 observations 135 observations 776 observations
79 countries
10 countries
66 countries
31 countries
Panel B: Long differences
𝚫𝑳𝒊𝒇𝒆 𝑺𝒂𝒕𝒊𝒔𝒇𝒂𝒄𝒕𝒊𝒐𝒏𝒄,𝒕 = 𝜷 𝚫𝒍𝒐𝒈 𝑮𝑫𝑷𝒄𝒕
0.47***
0.694*
0.35**
(0.128)
(0.387)
(0.163)
66 differences
10 differences
46 differences
ln(GDP)
N
0.278*
(0.164)
30 differences
βpanel ≈ 0.35
Sacks, Stevenson & Wolfers, Income and Happiness
29
Long Differences: World Values Survey
βpanel ≈
0.4
0.35
SVN
KOR
KOR Offscale
(1, 0.33)
MDA
VEN
0.2
ITA
CZE
BGR
ESP
MEX
AUT
FIN
UKR
IRL
FRA
MLT
DEU
BEL
CHE
NLD
BIH
HRV
DNK
EST
0.0
ISL
BRA
ZAF
CAN
AUS
PER
SCG
ALB PRI
PRT
NOR
USA
POL
JPN
GBR
LVA
SWE
-0.2
PHL
SVK
ROM
RUS
BLR
TUR
LTU
MKD
-0.4
HUN
-0.6
y = 0.00+0.47*ln(x) [se=0.14]
Correlation=0.54
-.5
-.25
0 and Happiness.25
Sacks, Stevenson
& Wolfers, Income
Change in log GDP, relative to country and wave fixed effects
.5
31
Conclusion: Stylized Facts about Well-being and Income

Within-country comparisons








Japan
USA
9 European nations
International Panel data



Since 1946
Multiple datasets
Both happiness and life satisfaction
No evidence of satiation
National Time Series


βwithin ≈ 0.35
Between countries:


USA
All countries
World Values Survey
Eurobarometer
βbetween ≈ 0.35
βtime series ≈ 0.35
βinternational panel≈ 0.35
Other measures of well-being

Pain, depression, smiling, good tasting food to eat, respect
Sacks, Stevenson & Wolfers, Income and Happiness
33
Is there any evidence of satiation?
“if we compare countries, there is no evidence that richer countries are happier
than poorer ones – so long as we confine ourselves to countries with incomes over
$15,000 per head.” - Layard (2005)
 Rich countries (GDP>$15,000)

Satisfaction=1.08*log(GDP)
[se=0.21]
 Poor countries (GDP<$15,000)

Satisfaction=0.35*log(GDP) [se=0.04]
 A 1% rise in GDP:

Has three times larger effects in rich countries than poor countries
 A $100 rise in GDP


3x larger effect in Jamaica than US
20x larger effect in Burundi than US
Sacks, Stevenson and Wolfers, Subjective Well-Being
34
Happiness and GDP (World Values Survey)
4
1.0
TZA
NGA
MEX
PRI
ISL
NLD
DNK
CAN
IRL
SAU
BELUSA
0.5
LUX
SWE
PHL
AUT
SGP
FRA
CHL ARG MLT JPN
IDN
FIN
ZAF
ESP
MAR
UGA KGZ
BIH
DEU
PRTISR
CZE
KOR
PERDZA
ITA
PAK IND
0.0
POL
TUR HRV
JOR MKD
GRC
SVN
BGD
CHN
IRN LTU HUN
SCG
EST SVK
BLR
ZWEIRQ
LVA
ALB
-0.5
MDA
RUS
UKR BGR
ROM
VEN
Standardized happiness
VNM
3
EGY
y = -0.89+0.11*ln(x) [se=0.05]
Correlation=0.29
Excluding NGA and TZA: y = -1.70+0.20*ln(x) [se=0.04]
Correlation=0.49
2
.5
1
2
4
8 and Happiness
16
Sacks,
Stevenson
& Wolfers,
Income
GDP (log scale)
32
-1.0
36
Enjoyment
0.90
CAN
NZL DNK
KWT
IRL
NOR
USA
LAO
SWE
CRI
CHE
AUS
NLD
AUT
PRYSLV
CYP
GBR
CHN ECU
GTM
MEX
ARG
TWN
UZB
BEL
VEN
THA
DJI IDN
BRA
TTO
NPL
COLPAN
SAU
MLI
JAM
URY
CZE
MYS
CHL
DEU
FRA
GUY
HND
ARE
KEN
MRT PHL
LVA
ZAF
BLZ
SVK
HUN
SEN
NIC BOL
NER
POL EST
SGP
TZA NGA
NAM
FIN
BGDKHM
ISRJPN
IND LKA
GIN
JOR PERROU BWA GRC HKG
SDN
SVN
DOM
MWI ZMB
KAZ
AFG
ESP
RWA
TJK
MKD
SRB RUS
ITA
CAF
EGYBIH
KGZ MDA
UKR
MDG
MMR
KOR
TUNBLR HRV PRT
TCD PAK COG
BFA
UGA
SYR
GHA
LTU
BGR
CMR
IRN
ALB
LBN
MNG
ETH
AZE
HTIBEN YEM MAR AGO
TUR
MOZ
DZA
ARM
TGO
VNM
0.80
0.70
ZWE
COD
0.60
0.50
LBR
BDI
GEO
SLE
0.40 Correlation = 0.49
.25
.5
1
2
4
8
16
Real GDP per Capita at PPP ($000s, log scale)
Stevenson and Wolfers, Subjective Well-Being
32
64
41
Depression
0.40
ETH
0.30
KHM
YEM
SLE
BGD
HTI
IRN
KOR
BOL
LBN
PHL
RWA
EGYAZE
PAK
ARM
HUN
PER
DZA
IND
NIC
AFG
CMRMDA SYR
UGA
BLZ
PRT
DOM
ARE
JOR ECU
SRB
BLR
TUR
JPN
BIH
COL
TZA TJK
HRV
ZAF CHL
GUY
TTO
GEO
BWA
SDN
GTM TUN
MKD
MDG
TGO
COG UKR
MOZ
MAR
RUS CZEISR
MWI
GIN
TWN
NGA
URY
LKA
SLV
KAZ
JAM
AGO
MNG
VNM
ROU
BGR
HKGSGP
CRI
MEX
SVK
GHA
LTU
EST
NAM
SAU
KWT
USA
ITA
MYS
HND
VEN
ARG
LVA GRCGBR
BEN
ZMB
NPL
TCD
CHN
ESP
CYP
PRY
NER
AUS
KGZ
BEL
BRA
FIN
UZB
PAN
CAN NOR
KEN DJI
SVN
MMR
MLI
NZL
THA
CAF BFA
FRA
POL
MRT
IRL
DEU
NLD
IDN
AUT
SWE
CHE
LAO
SEN
DNK
ALB
LBR
0.20
ZWE
0.10
0.00
BDI
COD
Correlation = 0.29
.25
.5
1
2
4
8
16
Real GDP per Capita at PPP ($000s, log scale)
Stevenson and Wolfers, Subjective Well-Being
32
64
42
Stress
0.80
PHL
0.60
SYR
USA
DZA ROU
LBN
TUR
HKG
IRN
KOR
NZL
TUN
DEU
DOM
ITA
TJK
AUS
PRTISR
CAN
BLZ
KHM
SLERWA
CHN COL
PER
GBR
MDGHTI
BOL
ECU CRIMEXSVK TWN
BEL SGP
JPN
JOR
FRA
CHE
EGY
UGA
AUT
NGA
MYSHUN
URY
YEM
IRL
TZA
ARE
TTO
BGD
BRA
ARG
ZAF
CHL
SLVTHA
VEN
LVA
IND
NIC
ESP
GHA
MWI
KWTNOR
FIN
SAU SWE
POL
CZE
BWA
ETH
GTM JAM
CMR
VNM
KEN
HND
PAN
AGO
SEN PAK
ESTSVN DNK
NLD
AFG
ARM
TGO
MDA GEO
TCD
MOZ ZMB
BEN
BLR LTU
COG AZE
UKR KAZ
NER
PRY
RUS
NPL
BFA LAO MNG
IDN
MLI
KGZ
MMR
UZB
DJI
MRT
0.40
GUY
LKA
ZWE
0.20
0.00
GRC
CYP
BDI
LBR
Correlation = 0.33
.25
.5
1
2
4
8
16
Real GDP per Capita at PPP ($000s, log scale)
Stevenson and Wolfers, Subjective Well-Being
32
64
43
Were you treated with respect all day yesterday?
1.00
ESP
PRY
NLD
PRT
ARG
KWT
SWE
COL
VEN
IRL
CHE
CRI
BEL
FRA
AUT
DOM
BRA
NIC
DNK
URY
SLVECU
POL
FIN
PAN
DEU
ARE NOR
CHLTTO SVN
NZL
UZB PHL
CYP
AUS
PER
CAN
ITA
HND
NER
BOL
VNM
EGY
GBR
USA
TWN
GRC
ARM
MEX EST
LBN
MOZ
SEN SDN
HUN
CHN
GIN GHA MRT
LVA
ROU RUS
JOR
NAM
TUN
IDN
MLI
PAK
GTM
ISR HKG
MAR
BGR
BFA KGZ
AFG
SAU
UKR
YEM
KEN
BWA
NGA
AGO MKD
MDGTZA TJK
KAZ
SVK
IRN
MYS
SRB
ZMB
AZE
DZA
JAM
HRV
MDAGUY
SYR
COG
GEO
BLZZAF
BLR
BEN
SLE
BGD CMR
ALB
CZE
DJI
TUR
MWI
CAF
KHM
TGO
SGP
BIH
THA
IND
UGA
LKA
LTU
0.90
LBR
COD
0.80
0.70
ZWE
BDI
HTI TCD
RWA
ETH
0.60
MNG
JPN
KOR
LAO
0.50
MMR
Correlation = 0.46
NPL
.25
.5
1
2
4
8
16
Real GDP per Capita at PPP ($000s, log scale)
Stevenson and Wolfers, Subjective Well-Being
32
64
44
Did you have good tasting food to eat yesterday?
1.00
PRT
IRL
FIN
CAN
AUT
NLD
GUY
NZL
TTO SVN
USA
PRY
SWE
AUS
MEX
LAO
DNK
BEL
HRV
VEN
GBR
SVK
KWTNOR
JAM SRB
EST
ARE
HUN
CHE
PAN
DEU
ITA
MNG
THA
UZB
EGYBIH
CZE ESP
SEN
MKD
CRI
ARG
BGR
MRT
URY
ECU
SAU
POL
JOR
CYP
GHA NGA
BRA
BLZ
LTU
SDN
ROU
COL
CHL
MDG
FRA
JPN
ISR
KAZ
KGZ
SLV
LBN
HND
GTM
BOL
IRNMYS
UKR
GIN
RUS
DOM
PER
TUR
NAM
LVA GRC
MOZNPL
TZA
ZAF
NICPHL
ALB
AZE BLR
KOR
AFG MMR KEN
TJK PAK
SLE
HKG
VNM
AGO
CMR
NER MLI
TGO
MDA
BWA
SGP
MWI
KHM IND MAR
CAF
BFA
ZMB
UGA
TCD
TWN
ARM
HTI
BGD
YEM
CHN
GEO
RWA
BEN
ETH
IDN
LKA
0.80
LBR
COD
0.60
ZWE
0.40
BDI
Correlation = 0.60
.25
.5
1
2
4
8
16
Real GDP per Capita at PPP ($000s, log scale)
Stevenson and Wolfers, Subjective Well-Being
32
64
45
Did you smile or laugh a lot yesterday?
0.90
NAM
SLV
CRI
VEN
PAN
IRL
LAONIC
PRY
BRA
PHL
ECU
ESPCAN
HND
NGA
ARG
NZL
GTM THA
MEXTTO CYP
COL
KWT
TWN
BEL
USA
JAM
NLD
CHN
AUS
JPN
DOM
ZAF
SDN IDN
GBR
LKA
CHL
DNK
URY
BOL
AUT
CHE
GUY
SWE NOR
MYS PRT FRA
PER
MRT
VNM
TZA
BLZ
MDG GHA
HKG
FIN
RWA
BWA GRC
EGY
MLIZMBKHM
POL
DEU
ARE
KEN
MOZ
MWI
NER
ITA
DJI
SEN
KOR
CZE
MAR
ISR
SGP
GIN
PAK
JOR
UZB
TUN
SAU
SLE UGA
HTI KGZ
COG
DZA
TUR
MMR
BFABEN
AGO
IND
HUN SVN
YEM
SYR
KAZ
CMR
IRN
SVK
AFG NPL
RUS
TJK
UKR ROU LVA
EST
ETH BGD
LTU
BGR
BLR
TCD
MNG
CAF
BIH
MKD
MDA
TGO
LBN HRV
ARM
0.80
LBR
0.70
ZWE
0.60
0.50
COD
ALB
SRB
AZE
0.40
Correlation
= 0.29
BDI
.25
.5
GEO
1
2
4
8
16
Real GDP per Capita at PPP ($000s, log scale)
Stevenson and Wolfers, Subjective Well-Being
32
64
46
Would you like to have more days just like yesterday?
0.90
KWT
HND SLV
SGP
MEX
PRY
VEN
MRT
CRI
PAN
DJI
GTM
UZB
NIC IDN
ECU
ARG
SAUESP
PAK
JAM
COL
KEN
IRL
TZA NGA PHL
BOL
AFG
ARE
DNK
URY
NER
PRT FRA
MOZMLI SEN
BRA
SWE
BEL
CAN
NLD NOR
MKD
BLZ
PER
ZAF
MYS
USA
CHE
NPL
CZE
NAM
GUY
BIH
AGO
HKG
CHL
SRB
THA
MDG GHA
LTU
HUN
VNM LKA
TTO
ESTNZL
DOM
KGZ
LAO
SDN
IND
JOR
ISR AUS
BGR
ZMBTJK
HRV SVN GBR
BFA
POL
UKR KAZ
FIN
LVA
TUR
JPN
AUT
ROU
CYP
MWI
UGA TCD
SLE GIN
KHM
BWA
CHN
TWN
EGY
ETH HTI
GRC
SVK
MDA
LBNRUS
RWA
BGD CMR
MAR
BLR
KOR
ITA
MNG SYR
DEU
MMR BEN
AZE
CAF
COG ALB
TGO
DZA
ARM
YEM
IRN
TUN
0.80
0.70
0.60
ZWE
BDI
COD
LBR
0.50
0.40
Correlation = 0.21
GEO
.25
.5
1
2
4
8
16
Real GDP per Capita at PPP ($000s, log scale)
Stevenson and Wolfers, Subjective Well-Being
32
64
47
Boredom
TUR
0.50
GEO
ARM AZE
SYR
DZA
MAR
0.40
YEM
AFG
ETH
0.30
PHL
KHM
TUN
ALB
LBN
HKG
IDN EGY
BOL
BLZ
GRCARE
RWA
PER
KOR
CHL
MDA
AGO COL
MKD
SRBMEX
USA
SLE
TGOUGA TJK
GUY
BIH
ISRGBR
SAU
MYS
GIN
SLV
CMR
ROU
ECU
GTM
THA URYHRV
BEN
KEN
BLRARG
BGDTCD PAK
AUS
NOR
SGP
ITA
BWA
CAN
ESP
IRL
TTO NZL
BGRPOL
CHN
CRI
UKR
JAM
LKA
DOM
UZB
SDN
GHA KGZ
KAZ RUS
ZAF
CAF NPL
TWN
JPN
VEN LTU
HND
TZA
KWT
IND
BFA
MOZ
MDG
NAM
FIN
ZMBSEN
EST
CYP
SVK
SWE
MLI
PRT FRA
PAN
VNM
MWI
BRA
LVACZE BEL
CHE
MNGPRY
NER
SVNDEU
DNK
MRT
AUT
NGA
HUN
LAO
= 0.11
NLD
MMR
NIC
ZWE
LBR
BDI
0.20
COD
0.10
HTI
JOR
IRN
Correlation
.25
.5
1
2
4
8
16
Real GDP per Capita at PPP ($000s, log scale)
Stevenson and Wolfers, Subjective Well-Being
32
64
50
Sadness
0.40
KHM
LBR
SLE
0.20
TUR
HTI
PRT
IRN
NIC
TGO
MDA
ROU
CHL
DOM
BLR
YEM COG
EGY
AGO
SYR
LTU
ECU
BGD
COL
ITA
HRV
LBN
BEN PAK
BGR
ARG
CMR
GUY
ISR
SRB
CAF
BRA
RWA
GIN
GBR
GTM AZE
HUN
POL
SVK
GEO UKR
BLZKAZ
MOZ
MEX
LVA
SLV
URY
RUS
DZA
BIH CRI
VNM
ALB
BFA
ESPARE
CYP
ETHUGA
ZMB
IND IDN
BWA
LKA
TCD SDN
TUN
ZAF
EST
JAM
SGP
DEU
AFG
GRC
TZA
PRY
BELUSA
FRA
MAR
TTO NZL
HND
AUS
JOR
GHA
CHE
CZE CAN
TJK
MWI
MKD
VEN
IRL
UZBMNG
KOR
SVN KWT
SEN
NLD
NER MDG
PAN
KGZ
AUT
NOR
NGA
MLI KEN
MYS SAU SWE
DNK
HKG
NPL
NAM
JPN
FIN
MRT
DJI
LAO
CHN THA
TWN
0.30
ZWE
BOL
PHL ARM PER
BDI
COD
0.10
MMR
0.00
Correlation = 0.15
.25
.5
1
2
4
8
16
Realand
GDP
per Capita
at PPP ($000s,
log scale)
Stevenson
Wolfers,
Subjective
Well-Being
32
64
51
Did you feel well rested yesterday?
0.90
KWT
PRY
IDN NAM
0.80
VEN
CHN
MYS
HND SLV THAPANMEX
JPN
HKG
CRI
MRT
ESP IRL
COL
VNMPHL
SGP
LAO
ECU
TWN
AUT
ARE
NGA
UZB
NPL
NIC MAR
ZAF
ARG PRT
URY
SAU NLD
DJI
GTM
EGY
TZA
SDN
AFG
BOL
MWI
CHE
GHA
KEN
SEN
KOR BEL
CAN
MLI
GIN
FIN
MNG
BLZ
DOM
NER
JOR
SVN
COG
DNK NOR
PER
UGA
CHL
BWA
MKD
ZMBKHM PAK GUY
BRA
DEU
JAM
SWEUSA
IND
MOZ BGD KGZ
BGR
CMR
GBR
AGO TUNSRB
RWA
TTO NZL
IRN
FRA
AUS
ISR
SLE
KAZ
LKA
BIH
POL
TUR
ITA
GRC
CZE
BEN
TCD
SVK
HRV
EST
CAF BFA
HTI TJK
LBN LVA
SYR UKR ROU RUS
LTU
YEM
TGO
MDG
DZA BLR
MMR
ETH
CYP
MDA
HUN
AZE
ALB
GEO
ARM
0.70
COD
0.60
ZWE
LBR
BDI
0.50
0.40
Correlation = 0.14
.25
.5
1
2
4
8
16
Real GDP per Capita at PPP ($000s, log scale)
Stevenson and Wolfers, Subjective Well-Being
32
64
54
Love
1.00
RWA
KHM
HUN
TTO CYP
LBN
CRI
NGA
ESP
TZA LAO
MEX
ECU
JAMBRA
VEN
ARG
BEL
GRC
CAN
DNK
USA
PRT
NLD
VNM
NZL
ITA
COL URY
MDG
DOM
TUR
ARE
SAU AUS
MWI
CAF
GHA
ZAF
PANCHL
KEN PAK
ZMB
NAM
NIC
DEU
IRL
SWE
AUT
CHE
GBR
FRA
FIN
KWT
SLV
HNDEGY
PER
SRB
BIH
SLE
IND
TWN
BGD
BLZ
HRV SVN
MKD
BOL
MOZ HTI
IRN
CHN
NOR
LKA
POL
GTM THA
UGA
ISR
SDN
JORALB
GIN
BWA
BFA SEN
ROUMYS
NER MLI
IDN AGO
AFG
HKG
CMR
BGR SVK
NPL
CZE JPN SGP
MRT
KOR
MMR BEN
LVA
TGO
EST
LTU
RUS
TCD YEM
UKR
ETH
AZE
TJK MDA
KAZ
MAR
BLR
GEO
PRY
GUY
0.80
LBR
ZWE
0.60
PHL
BDI
COD
0.40
KGZ
UZBMNG
ARM
0.20
Correlation = 0.19
.25
.5
1
2
4
8
16
Real GDP per Capita at PPP ($000s, log scale)
Stevenson and Wolfers, Subjective Well-Being
32
64
56
Physical Pain
0.50
SLE
CAF
LBR
0.40
TGO
ETH
EGYDZA
SYR
YEM
CMR
SDN
NER
JOR PER
SEN
BEN
COG
CHL
AGO TUN
ARM
DOM ARG
BFA MRTNIC BOL
AZE ROU
PAK
MOZ TZA
UGA
ISR KWT
GIN
TCD
ALB
GEO
HUN
ECU
KHM
RWA GHA
PRT ESP
BRA
FRA
IRN
CRIMEX
LKA SLV COL
GTM UKR LBN
CYPBEL
URY BWA KOR
MWI
VEN
CHESGP
NGA
TJK
USA
HRV
SVN
MAR
GUY
BGD
GRC
MLI
KAZ
BLR
KGZ
IND
NPL
NZL
HND
PHL
SVK
GBR
CAN
AUS
AFG MMRZMB
UZB
BLZSRB
TTO ITA
PRY BIH
ARE
ZAF
MKD
LTUCZE DEU
TUR
DJI
THA BGRRUS
DNK
AUT
PAN LVASAU SWE
MDG KEN
NLD
FIN
NAM
POL
JPN
NOR
IDN
MYS EST
TWN IRL
HKG
CHN JAM
MNG
LAO
0.30
ZWE
BDI
COD
0.20
0.10
MDA
HTI
Correlation = 0.39
VNM
.25
.5
1
2
4
8
16
32
Real GDP per Capita at PPP ($000s, log scale)
Stevenson and Wolfers, Subjective Well-Being
Source: Alan Krueger, Betsey Stevenson and Justin Wolfers, “A World of Pain”.
64
57
A Global Map of PainGlobal Map of Pain
Proportion of population
experiencing pain
[0.00,0.05] (0)
(0.05,0.10] (1)
(0.10,0.15] (4)
(0.15,0.20] (22)
(0.20,0.25] (65)
(0.25,0.30] (49)
(0.30,0.35] (34)
(0.35,0.40] (13)
(0.40,0.45] (5)
(0.45,0.50] (2)
(0.50,0.55] (1)
No data (56)
Did you experience the following feelings during a lot of the day yesterday? How about physical pain?
Stevenson and Wolfers, Subjective Well-Being
Source: Alan Krueger, Betsey Stevenson and Justin Wolfers, “A World of Pain”.
58
 Blank slide: End of talk
Sacks, Stevenson & Wolfers, Income and Happiness
59
Research Program
 Research program (with Betsey Stevenson) that seeks to
establish robust stylized facts about subjective well-being

Relationship between income and happiness
“Economic Growth and Happiness: Reassessing the Easterlin Paradox”

Consequences of income inequality
“The Happiness Price of Income Inequality” (in progress)

Happiness and gender
“The Paradox of Declining Female Happiness”

Subjective well-being and the business cycle
“Is Business Cycle Volatility Costly?”

Trends in the distribution of happiness
“Happiness Inequality in the United States”

Affect versus evaluative measures of well-being
“A World of Pain” (also with Alan Krueger)
Sacks, Stevenson & Wolfers, Income and Happiness
60
Business Cycle
andthe
Happiness,
U.S.Cycle
Subjective Well-Being
and
Business
Correlation = -0.45
0.10
-2
-1
Unemployment rate - Natural Rate
0.05
-0.05
-0.10
Scale reversed
0.00
0
1
2
3
Happiness
Unemployment, relative to NAIRU (right axis; inverse scale) 4
-0.15
1970
1980
1990
2000
Stevenson and Wolfers, Subjective Well-Being
2010
62
Feb-08
Mar-08
Jan-08
Satisfaction Ladder (%"Thriving": Satisfaction
>8)
Stevenson and Wolfers, Subjective Well-Being
Sep-09
Aug-09
Jul-09
Jun-09
May-09
Apr-09
Feb-09
Mar-09
Jan-09
Dec-08
Nov-08
Oct-08
Sep-08
Aug-08
Jul-08
60
Jun-08
May-08
Apr-08
New Opportunity:
Daily Data
Satisfaction:
Daily Data
Source: Gallup Daily Poll
55
50
45
40
35
30
63
in the United States
Happiness in theHappiness
United States
%>Median Happiness:
Ordered probit index:
Women
Women
Men
Men
Difference
.4
.2
0
-.2
1970
1980
1990
2000
Source: General
Social
Survey & Wolfers, Income and Happiness
Sacks,
Stevenson
2010
65
Research Question
Does inequality undermine average levels of
subjective well-being?
Surprisingly mixed findings:

“The presumed link between equality and happiness fails to appear, at least where
income inequality is concerned. Average happiness is as high in countries with great
income inequality as in nations where income differences are small” –Veenhoven
(2000)

Including inequality in our regressions using the available data, we find that is has a
negative effect, although its’ size and significance levels are both low. –Di Tella and
MacCulloch (2008)

“In the whole World Values Survey sample, the Gini coefficient has a positive (albeit
not always significant) effect on life satisfaction.”—Guriev and Zhuravskaya (JEP
2008, p.157)

“Adding a World Bank estimate of the Gini coefficient for each national economy added
no explanatory power to the well-being equation.”—Helliwell (2003)
Stevenson & Wolfers, Inequality & Happiness
67
A Simple Framework
 Individual well-being:
𝑊𝑒𝑙𝑙 − 𝑏𝑒𝑖𝑛𝑔𝑖𝑐 = 𝛼 + 𝛽 log 𝑦𝑖𝑐 + 𝜖𝑖𝑐
 Average well-being in each country:
𝑊𝑒𝑙𝑙 − 𝑏𝑒𝑖𝑛𝑔𝑐 = 𝛼 + 𝛽 log 𝑦
𝑐
+ 𝜖𝑐
Average of log income,
not
Log of average income
 Which implies:
𝑊𝑒𝑙𝑙 − 𝑏𝑒𝑖𝑛𝑔𝑐 = 𝛼 + 𝛽 log 𝑦𝑐 − 𝛽 log 𝑦𝑐 − log 𝑦
𝑐
+ 𝜖𝑐
Mean log deviation
Equal and
opposite effects
Stevenson & Wolfers, Inequality & Happiness
68
Satisfaction
and Inequality,
Conditional
Log GDP
Conditional
Relationship
Between
GDP &onMLD
2.0
Satisfaction = 0.30*log GDP (se=0.02) -0.22*inequality (se=0.14)
1.0
CRI
DNK
GUY
FINCOD
GTM
NZLVEN
NLD
PANCOL
CHE
CAN
SWE
JAM
MEX
MOZ
ISR
AUS
NOR
BEL
IRL
VNM
BRA
LBR
USA
LAO
AUT
JOR
NPL
UZB
BDIBGD MWI
CAF
TKM HND
MDA
ESP
GHA
DJI
IND
GBR
NER
N
GA
ARG
UGA
RWA
MDG
ETH PAK
THA
NIC
ZMB
CZE
KGZ
ITA
PRY
TJK FRA
MYSIDN
SEN
GIN
SLV
TTO
DEU
URY
CHL
TZA
MRT
MLI
EGY
TUN
KAZ
MAR
PHL
LUX
ECU
GRC
HRV
BLR
YEM
DZA
KEN
SGP
LTU
POL
CIV
BFA
TCD
CMR
UKR
MNG
HTI
DOM
SLE
JPN ROU
KHM
IRN
PER
CHN
SVN
BIH
TUR
PRT
RUS
LKA
ALBAZE
BEN
ARM
SVK KOR
EST
TGO
MKD
HUN LVA
ZWE
GEOHKGCOG
0.0
BOL
NAM
ZAF
AGO
BWA
COM
BGR
-1.0
-2.0
-0.4
-0.2
0.0
0.2
0.4
0.6
0.8
Inequality: E[Mean log deviation | Log GDP]
(World Bank Inequality Data)
Stevenson & Wolfers, Inequality & Happiness
Source: Betsey Stevenson and Justin Wolfers, “Inequality and Subjective Well-Being”.
69
Variation in Log GDP and Mean Log Deviation
30
Inequality: Mean
25
20
15
10
5
*Bars are 1/20th as wide
0
-4
-3
-2
30
Inequality:
25
20
15
10
5
*Bars are 1/20th as wide
0
-4
-3
-2
$1
28
k
2
$6
4k
1
$3
2k
0
$1
6k
-1
$8
k
-2
$4
k
$2
k
$1
k
k
-3
$.
5
-4
$.
2
25
20
15
10
5
0
5k
Distribution
of Log GDP
and Inequalty
30
Log GDP per Capita: SD=1.34
3
4
Log Deviation (Gallup measure): SD=0.16
-1
0
1
2
3
4
3
4
Mean Log Deviation | Log GDP: SD=0.14
-1
0
1
Variation
around
the mean;
Log points
Stevenson
& Wolfers,
Inequality
& Happiness
2
Source: Betsey Stevenson and Justin Wolfers, “Inequality and Subjective Well-Being”.
70
Aggregate Happiness Trends: Comparing Dist’ns
Trends in the Distribution of U.S. Happiness
0.20
Average Happiness
0.00
-0.20
Assuming that the distribution of happiness is:
Normal
-0.40
1972
1976
1980
1984
Logistic
1988
1992
Uniform
1996
2000
2004
2008
1996
2000
2004
2008
Happiness Inequality
1.40
1.20
1.00
0.80
1972
1976
1980
1984
1988
1992
Sacks, Stevenson & Wolfers, Income and Happiness
72
Trends in Average Levels of Happiness Between Groups
0.25
0.00
-0.25
Education
-0.50
-0.75
College grads
Some college
High school
<High school
Gender
Men
Race
Women
White
Non-white
0.25
0.00
-0.25
Region
-0.50
Age Group
Marital Status
18-34 yrs 35-49 yrs 50+ yrs
-0.75
1970
1980
1990
2000
2010 1970
Married
1980
Unmarried
1990
2000
2010 1970
Northeast
Midwest
South
West
1980
Sacks, Stevenson & Wolfers, Income and Happiness
1990
2000
2010
73