The Impact of Inequality on Subjective Well-Being

One of the most debated questions in hapiness studies is whether or not there is a relationship between income and life satisfaction. The evidence is rather mixed (Easterlin, 1974; Hagerty and Venhooven, 2003). This study attempts to give an answer as well, using preliminary data from the European Survey on Income and Living Conditions (EU-SILC), which contains a very good measure of income and several indicators on subjective well-being (overall life satisfaction, meaning of life, positive and negative affects). Multilevel regression is employed as a method, in order to study the impact of country level variables, especially related to income distribution, and the differences between European societies. The hypothesis is that inequality may be the missing link between GDP and subjective well-being.