nep-hap New Economics Papers
on Economics of Happiness
Issue of 2023‒02‒20
two papers chosen by

  1. Subjective Inequity Aversion: Unfair Inequality, Subjective Well-Being, and Preferences for Redistribution By Bohmann, Sandra; Kalleitner, Fabian
  2. Measuring well-being and lives worth living By Marc Fleurbaey; Gregory Ponthiere

  1. By: Bohmann, Sandra; Kalleitner, Fabian
    Abstract: This paper argues that `inequity aversion' can be understood as an emotional reaction to perceived injustice that arises from individuals’ comparisons of their own and others’ outcomes to a subjective fairness ideal. In particular, we assume that subjective perceptions of inequity and not objective deviations from equality are crucial to understanding how individuals react to inequality. The paper formalizes these insights by adapting the Fehr and Schmidt (1999) model of inequity aversion replacing the fairness frame of objective equality with subjectively perceived equity. We test this model using data from the European Social Survey 2018 analyzing the association between respondents' perceived fairness of own, top, and bottom incomes with subjective well-being and preferences for redistribution. Results from spline regressions with country-fixed effects indicate that perceived injustice of own and top incomes is positively related to individuals' subjective well-being. For the perceived injustice of bottom incomes, we find no substantive relationships with subjective well-being. Further analyses indicate a positive link between the perceived injustice of bottom and top incomes and preferences for redistribution. In sum, our results suggest that injustice perceived for oneself is connected to utility while perceived injustice of others is related to increased willingness to back redistributive policy proposals even if they are not in line with material self-interest.
    Date: 2023–01–23
  2. By: Marc Fleurbaey (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Gregory Ponthiere (UCL - Université Catholique de Louvain = Catholic University of Louvain)
    Abstract: We study the measurement of well-being when individuals have heterogeneous preferences, including dierent conceptions of a life worth living. When individuals dier in the conception of a life worth living, the equivalent income can regard an individual whose life is not worth living as being better o than an individual whose life is worth living. In order to avoid this paradoxical result, we reexamine the ethical foundations of well-being measures in such a way as to take into account heterogeneity in the conception of a life worth living. We derive, from simple axioms, an alternative measure of well-being, which is an equivalent income net of the income threshold making lifetime neutral. That new well-being index always ranks an individual whose life is not worth living as worse-o than an individual with a life worth living.
    Keywords: Well-being measurement equivalent income lifetime value of life. JEL classication codes: I31 J17, Well-being, measurement, equivalent income, lifetime, value of life.
    Date: 2022–04–20

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