Income Inequality and Happiness

Oishi, S., Kesebir, S., & Diener, E. (2011). Income inequality and happiness. PsychologicalScience, 22(9), 1095-1100.

Over the past few decades, the level of income inequality between social classes in the United States has grown significantly. Although previous psychological research has investigated the relationship between income and happiness, there has been little attention to the relationship between income inequality and happiness. Oishi, Kesebir, and Diener (2011) hypothesized that psychological factors (perceptions of trust and fairness) rather than economic factors (reduced income) may explain why Americans report lower levels of happiness in times of economic inequality. General Social Survey data from 53,043 American respondents provided measures of household income, subjective well-being, and perceived fairness and general trust. As predicted, Americans were, on average, happier in times of economic equality rather than economic inequality. Results further indicated that lower levels of perceived fairness and general trust, rather than economic factors, explained the negative association between happiness and income inequality.

Making Connections

Social comparison

Media Supplement

Psychologist Michael I. Norton has explains that Americans underestimate U.S. wealth inequality in this NPR podcast.