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Wealth inequality, income inequality, and subjective well-being: A cross-country study Cover

Wealth inequality, income inequality, and subjective well-being: A cross-country study

International Journal of Management and Economics
Volume 60 (2024): Issue 3 (September 2024)
By:   
Open Access
|Jun 2024
Figures & tables

Figures & Tables

Table 1.

Descriptive statistics:Inequality measures.

CountriesMeanStd. Dev.Min.Max.
Pre-tax income:Bottom 50%5917.285.316.1826.36
Pre-tax income:Middle 40%5942.495.1129.2952.81
Pre-tax income:Top 10%5940.229.7927.4763.62
Pre-tax income:Top 1%5913.835.096.6128.61
Post-tax income:Bottom 50%4124.196.908.1034.83
Post-tax income:Middle 40%4143.485.0129.5353.75
Post-tax income:Top 10%4232.3310.6022.0860.69
Post-tax income:Top 1%429.915.144.9224.36
Wealth:Bottom 50%583.912.76−2.7711.76
Wealth:Middle 40%5834.586.6816.8846.17
Wealth:Top 10%5861.518.6243.9485.89
Wealth:Top 1%5828.089.1513.8452.35

1 Notes: This table presents the following statistics for each variable: Number of country-level observations, average value, standard deviation, minimum and maximum value.

Table 2.

Average marginal effects from the ordered probit model for the probability of being very happy or being very satisfied with life.

HappinessLife satisfaction
(1)(2)(3)(4)(5)(6)(7)(8)
Pre-tax income: Bottom 50%0.0050.002
Pre-tax income: Middle 40%(0.004)–0.004*(0.002)–0.000
Pre-tax income: Top 10%(0.002)0.001(0.002)–0.000
Pre-tax income: Top 1%(0.001)0.004
(0.002)		(0.001)0.001
(0.001)
Observations265,733265,733265,733265,733266,158266,158266,158266,158
Countries5858585858585858
Pseudo-R20.1290.1290.1290.1290.0660.0660.0660.066

1 Notes: ***p < 0.01, **p < 0.05, *p < 0.10. Standard errors clustered at the country level. Country and year fixed effects included. Individual-level controls and log of GDP per capita included. Table A1 in the Appendix presents the list of countries included in the regressions and the number of observations for each country

Table 3.

Average marginal effects from the ordered probit model for the probability of being very happy or being very satisfied with life.

HappinessLife satisfaction
(1)(2)(3)(4)(5)(6)(7)(8)
Post-tax income: Bottom 50%0.006**–0.002
Post-tax income: Middle 40%(0.003)–0.003(0.002)–0.003
Post-tax income: Top 10%(0.003)–0.000(0.002)0.002
Post-tax income: Top 1%(0.002)0.001
(0.001)		(0.001)0.002
(0.002)
Observations153,359153,359156,781156,781153,702153,702157,122157,122
Countries4141424241414242
Pseudo-R20.1480.1470.1480.1480.0680.0680.0680.068

1 Notes: ***p < 0.01, **p < 0.05, *p < 0.10. Standard errors clustered at the country level. Country and year fixed effects included.Individual-level controls and log of GDP per capita included. Table A1 in the Appendix presents the list of countries included in the regressions and the number of observations for each country

Table 4.

Average marginal effects from the ordered probit model for the probability of being very happy or being very satisfied with life.

HappinessLife satisfaction
(1)(2)(3)(4)(5)(6)(7)(8)
Wealth: Bottom 50%–0.0060.001
Wealth: Middle 40%(0.005)–0.006**(0.003)
–0.003*
Wealth: Top 10%(0.003)0.004**(0.002)0.001
Wealth: Top 1%(0.002)0.004**
(0.002)		(0.001)0.002**
(0.001)
Observations256,164256,164256,164256,164256,588256,588256,588256,588
Countries5757575757575757
Pseudo-R20.1300.1310.1310.1310.0680.0680.0680.068

1 Notes: ***p < 0.01, **p < 0.05, *p < 0.10. Standard errors clustered at the country level. Country and year fixed effects included. Individual-level controls and log of GDP per capita included. Table A1 in the Appendix presents the list of countries included in the regressions and the number of observations for each country.

Table 5.

Average marginal effects from the ordered probit model for the probability of being very happy or being very satisfied with life:“poor”countries

HappinessLife satisfaction
(1)(2)(3)(4)(5)(6)(7)(8)
Wealth: Bottom 50%−0.017***−0.005
Wealth: Middle 40%(0.006)−0.010***(0.005)−0.006**
Wealth: Top 10%(0.003)0.007**(0.003)0.004*
Wealth: Top 1%(0.002)0.006**
(0.002)		(0.002)0.004***
(0.002)
Observations133,929133,929133,929133,929134,104134,104134,104134,104
Countries2929292929292929
Pseudo-R20.1230.1240.1240.1230.0640.0650.0650.065

1 Notes: ***p < 0.01, **p < 0.05, *p < 0.10. Standard errors clustered at the country level. Country and year fixed effects included. Individual-level controls and log of GDP per capita included. Table A1 in the Appendix presents the list of countries included in the regressions and the number of observations for each country. The subsample of countries consists of those classified as low-income, lower-middle-income, and upper-middle-income economies by the World Bank, according to the survey year [World Bank, 2024].

Table 6.

Average marginal effects from the ordered probit model for the probability of being very happy or being very satisfied with life: “rich” countries.

HappinessLife satisfaction
(1)(2)(3)(4)(5)(6)(7)(8)
Wealth: Bottom 50%–0.0050.006***
Wealth: Middle 40%(0.005)0.003(0.002)0.000
Wealth: Top 10%(0.003)–0.003(0.003)–0.001
Wealth: Top 1%(0.002)–0.002
(0.002)		(0.002)0.000
(0.002)
Observations122,235122,235122,235122,235122,484122,484122,484122,484
Countries3535353535353535
Pseudo-R20.1370.1370.1370.1370.0650.0650.0650.065

1 Notes: ***p < 0.01, **p < 0.05, *p < 0.10. Standard errors clustered at the country level. Country and year fixed effects included. Individual-level controls and log of GDP per capita included. Table A1 in the Appendix presents the list of countries included in the regressions and the number of observations for each country. The subsample of countries consists of those classified as high-income economies by the World Bank, according to the survey year [World Bank, 2024]. The total number of countries studied in Tables 5 and 6 altogether is larger than the number presented in Table 4, since some countries were classified as both “poor” and “rich,” depending on the survey year.

Figure 1.

Happiness (left panel) and life satisfaction (right panel): no country fixed effects.

Notes: Figures show average marginal effects from ordered probit models for the probability of being very happy (left) and very satisfied with life (right). Year fixed effects are included, country fixed effects are not.

Figure 2.

Happiness (left panel) and life satisfaction (right panel): no year fixed effects.

Notes: Figure shows average marginal effects from ordered probit models for the probability of being very happy (left) and very satisfied with life (right). Country fixed effects are included, year fixed effects are not.

Table A1.

The list of countries and the number of observations included in the regressions

Number of observations
CountryTable 2: Pre-tax incomeTable 3: Bottom 50% and Middle 40% of Post-tax incomeTable 3: Top 10% and Top 1% of Post-tax incomeTable 4: WealthTable 5: Low- and middle-income economiesTable 6: High-income economies
Argentina2,8337667662,8332,067766
Australia5,6115,6115,6115,61105,611
Austria2,5022,5022,5022,50202,502
Belgium1,3421,3421,3421,34201,342
Brazil7,1334,4024,4025,4925,4920
Bulgaria4,0784,0784,0784,0784,0780
Canada7,41903,4227,41907,419
Chile4,6383,7363,7364,6382,9301,708
China6,959006,9596,9590
Colombia5,9292,9612,9615,9295,9290
Croatia2,3962,3962,3962,39602,396
Cyprus3,6353,6353,6353,63503,635
Czech Republic3,3923,3923,3923,3928652,527
Denmark4,1044,1044,1044,10404,104
Dominican Republic296002962960
Ecuador2,3062,3062,3062,3062,3060
Egypt6,760006,7606,7600
El Salvador1,033001,0331,0330
Estonia4,7154,7154,7154,7159233,792
Finland3,6853,6853,6853,68503,685
France3,8823,8823,8823,88203,882
Georgia5,928005,9285,9280
Germany10,05410,05410,05410,054010,054
Greece2,3552,3552,3552,35502,355
Hong Kong3,05700000
Hungary3,3283,3283,3283,32803,328
Iceland2,1192,1192,1192,11902,119
India10,028008,3118,3110
Iraq6,619006,6196,6190
Ireland5155155155150515
Italy3,0743,0743,0743,07403,074
Jordan3,478003,4783,4780
Korea4,784004,78404,784
Latvia2,2362,2362,2362,2362,2360
Lebanon2,300002,3002,3000
Lithuania2,9612,9612,9612,9611,9351,026
Luxembourg1,1471,1471,1471,14701,147
Mexico7,2394,9254,9257,2397,2390
Netherlands5,4465,4465,4465,44605,446
New Zealand3,032003,03203,032
Norway4,0064,0064,0064,00604,006
Peru6,2055,2805,2806,2056,2050
Poland3,8423,8423,8423,8421,9141,928
Portugal7827827827820782
Romania7,2297,2297,2297,2297,2290
Russian Federation9,197009,1979,1970
Serbia6,1546,1546,1546,1546,1540
Singapore3,587003,58703,587
Slovakia2,8132,8132,8132,8138611,952
Slovenia3,4303,4303,4303,43003,430
South Africa13,1790010,92710,9270
Spain5,5585,5585,5585,55805,558
Sweden4,8244,8244,8244,82404,824
Switzerland5,6375,6375,6375,63705,637
Turkey11,9300011,02811,0280
USA6,9916,9916,9916,99106,991
United Kingdom3,2913,2913,2913,29103,291
Uruguay2,7301,8491,8492,7302,7300
DOI: https://doi.org/10.2478/ijme-2024-0017 | Journal eISSN: 2543-5361 (formerly 2299-9701) | Journal ISSN: 2299-9701
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Language: English
Page range: 227 - 242
Submitted on: Apr 25, 2023
Accepted on: Apr 12, 2024
Published on: Jun 19, 2024
Published by: SGH Warsaw School of Economics
In partnership with: Paradigm Publishing Services
Publication frequency: 4 issues per year
Keywords:
income inequality,
wealth inequality,
happiness,
subjective well-being,
life satisfaction
JEL:
D31,
D63,
I31
Related subjects:
Business and economics,
Business management,
Management accounting, financial controlling, cost calculation, investment

© 2024 Katarzyna Sałach-Dróżdż, published by SGH Warsaw School of Economics
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

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