Happiness inequality, revisited

At the start of the month, I wrote a post about happiness inequality. The research paper I reference there did a poor job (I think) of measuring happiness inequality (using the standard deviation of happiness). I just finished reading this 2013 article, by Indranil Dutta (University of Manchester) and James Foster (George Washington University), published in the journal Review of Income and Wealth (appears to be gated, but there is a working direct link to the paper here), which does a much better job.

Dutta and Foster use data from the US General Social Survey from 1972 to 2010, which has 49,433 observations of happiness, all measured as responses to the question: "Taken all together, how would you say things are these days - would you say that you are very happy, pretty happy or not too happy?"

They discard the standard deviation as a measure, much as I did in my earlier post:

Variance or standard deviation is an unsatisfactory measure of inequality under a cardinal scale...

Instead, they use measures based on the median, rather than the mean or the standard deviation. It's possible that basing an inequality measure on the median may go some way to reducing the problems with happiness measures I highlighted in this post last week, because the median-based measure is scale invariant (it doesn't depend on how you weight the different 'levels' of happiness). I'm sure someone who is much more mathematically inclined than I am can get to the bottom of that question, and given the strength of the conclusions drawn by Bond and Lang against happiness measures, I'd say that it is already a priority for someone.

Anyway, using their median-based measures Dutta and Foster find that:

...happiness inequality decreased from its highest level in the 1970s, through the 1980s and 1990s. Only in the 2000s did it start to rise again. However, in 2010 there has been a remarkable decline in inequality, making it the year with the lowest inequality under the linear scale of the AF measure. This achievement is offset, to some extent, by the fact that the average level of happiness in 2010 turns out to be the lowest among all the years.

This is an interesting result, when you place it alongside the fact that over this period, inequality in incomes has been increasing in the U.S. So, there is increasing inequality in incomes alongside decreasing inequality in happiness, and a moderate decline in median happiness. It would be interesting to consider a model that fits those stylised facts.

They also find that:

...on average, women have higher happiness inequality relative to men.

Add that to the list of stylised facts to explain in a model of happiness and inequality. Why is happiness both declining and converging over time in the U.S.?

Read more:

• Happiness is dead?
• Is there a happiness Kuznets curve?