Can beliefs about inequality make people unhappy?

In recent posts I have been considering whether some of the findings by Arthur Brooks in “Gross National Happiness” apply to countries other than the United States (see: here, here and here). In this post I continue that theme and focus particularly on the effect of political beliefs on the extent to which people are made unhappy by income inequality.

Brooks observes that levels of happiness, beliefs about inequality and income mobility, and political allegiance tend to go together. Americans who think that income differences are too large (about half the population) are a lot less likely to believe that there is a great deal of upward mobility in the United States. Political liberals are a lot less likely than conservatives to believe that there is a lot of upward income mobility in America. Surveys also show that pessimists about income mobility are a lot less likely to be very happy than are optimists.

There is some evidence from published research relating to other countries that political views tend to influence the extent that inequality of income makes people unhappy. Research by Alberto Alesina, Rafael Di Tella and Robert MacCulloch suggests that in Europe the poor and those on the left of the political spectrum tick down their happiness scores when inequality is high, but in the United States the happiness of the poor and those on the left is largely uncorrelated with inequality. Rafael Di Tella and Robert MacCulloch also report the results of a 36 country study based on the World Values Survey which suggests that low income has less of an adverse effects the happiness of low-income people if it is accompanied by a belief that poor people have a chance of escaping from poverty in the country in which they live. (See: Di Tella and MacCulloch in ‘Some uses of happiness data in economics’, Journal of Economic Perspectives, Winter 2006, p 42).

In earlier posts I have noted that in most countries the happiness of lower income people tends to be closely related to the happiness of middle and upper income people in the same countries (here) and that the gap in happiness between upper and lower income people is not related in any clear and obvious way to differences in the extent of income inequality among different countries (here). I now want to report on some research in which I have attempted to assess whether political views influence the proportion of lower income people who are satisfied with life.

The research involved use of multiple regression to explain the proportion of lower income people who are satisfied with life in terms of: the proportion of upper income people who are satisfied with life, self-positioning on the political spectrum; differences in self-positioning on the political spectrum between upper and lower income people; the proportion of the population who believe that it would be a good thing if there was less emphasis on money; differences between upper and lower income people in the proportions who believe that it would be a good thing if there was less emphasis on money; an indicator of religious service attendance and a measure of income inequality (gini index). (Data used in the study were for 66 countries for the year 2000 and have been sourced from “Human Beliefs and Values” by Ronald Inglehart et al.)

The results suggest that the most significant variables explaining the proportion of lower income people who are satisfied with life are:

• the proportion of upper income people who are satisfied with life (by far the most important);
• differences in self-positioning on the political spectrum between upper and lower income people;
• the proportion of the population who believe that it would be a good thing if there was less emphasis on money; and
• differences between upper and lower income people in the proportions who believe that it would be a good thing if there was less emphasis on money.
  
  

These results support the view that the impact that inequality has on the happiness of low income people is influenced by their political beliefs and their beliefs about the importance of money and material things.

(Research presented on this blog – as on any other blog - should be viewed with more caution than peer-reviewed research presented in academic journals. For quality assurance purposes I am prepared to make detailed results of research available to anyone who wants them and the data available to anyone who wants to replicate studies.)