The effects of U.S. county and state income inequality on self-reported happiness and health are equivalent to zero

Abstract

Purpose A popular idea in the social sciences is that contexts with high income inequality undermine people’s well-being and health. However, existing studies documenting this phenomenon typically compare a small number of higher-level units (countries/regions). Here, we use local income inequality indicators and temporal designs to provide the most highly powered test to date of the associations between income inequality and self-reported happiness and health in the USA Method We combined county-level income inequality data (county-level Gini coefficients) with the responses from the General Social Survey (GSS) Cross-sectional dataset (13,000 + participants from ≈1000 county-waves) and Panels (3 × 3000 + participants from 3 × ≈500 county-waves); we used the GSS happiness (“not too happy,” “pretty happy,” or “very happy”) and health (“poor,” “fair,” “good,” or “excellent”) variables. Results Multilevel-ordered logistic models and equivalence tests revealed that the within-county effects of income inequality on self-reported happiness and health were systematically equivalent to zero. Additional analyses revealed that the within-state effects were identical, that using alternative measures of state income inequality led to the same conclusions, and that lagged effects (between + 1 and + 12 years) were never significant and always equivalent to zero. Conclusion The present work suggests that—at least in the USA—income inequality is likely neither associated with self-reported happiness nor with self-reported health.

A competitiveness-based theoretical framework on the psychology of income inequality

“…In contrast, recent research comparing several hundreds of regions revealed that the relationship between income inequality and well-being was not only statistically indistinguishable from zero, but also significantly equivalent to zero (Sommet & Elliot, 2022a). 3 Moreover, from a theoretical perspective, one need not expect the competitiveness elicited by income inequality to be exclusively aversive.…”

A Competitiveness-Based Theoretical Framework on the Psychology of Income Inequality

“…From an empirical perspective, most of the influential studies in this area are critically underpowered insofar as they compare only a few dozen countries/regions to establish a relationship between income inequality and well-being (for a study measuring well-being by asking participants whether they are happy, see Oishi et al, 2011; for a study measuring well-being by asking participants whether they are satisfied with their life, see Alesina et al, 2004). In contrast, recent research comparing several hundreds of regions revealed that the relationship between income inequality and wellbeing was not only statistically indistinguishable from zero but also significantly equivalent to zero (Sommet & Elliot, 2022). 3 Moreover, from a theoretical perspective, one need not expect the competitiveness elicited by income inequality to be exclusively aversive.…”

A socioecological approach to explaining how economic inequality and psychological tendencies mutually constitute each other.

“…The accumulation of negative exposure and lack of resources held by individuals, along with underinvestment across physical, health, and social infrastructure could be a key lived experience of economic inequality. Indeed, recent work shows that the effects of inequality on health outcomes are best explained at the local level (Sommet & Elliot, 2022a). Thus, one key experience of economic inequality may be the physical environment with its public infrastructure.…”