 | Lous, Bjorn On free markets, income inequality, happiness and trust PhD Thesis Tilburg University, Center for Economic Research (CentER), 2020, ISBN: 978 90 5668 620 8. Abstract | Links | BibTeX @phdthesis{Lous2020,
title = {On free markets, income inequality, happiness and trust},
author = {Bjorn Lous},
url = {https://pure.uvt.nl/ws/portalfiles/portal/32241440/Lous_PhD_Thesis_final.pdf},
isbn = {978 90 5668 620 8},
year = {2020},
date = {2020-01-31},
school = {Tilburg University, Center for Economic Research (CentER)},
abstract = {Even though on average Western countries are richer than ever before, an undercurrent of widespread discomfort and uncertainty has been revealed in recent years. This has led to renewed critical interest in the foundations and assumptions of the capitalist economic model. This thesis focuses on the role of inequality in the functioning of the economy. Specifically, three relationships are investigated. The first empirical chapter sets the general context, looking at the effect of economic freedom on (country-level) life satisfaction through income inequality. The second research chapter analyzes the effect of income inequality on trust and inequality in life satisfaction. The third and fourth chapters zoom in on the microeconomic level, discussing how national income inequality relates to individual life satisfaction, and to individual inclination to trust other people. In addition, the differences between different income groups are investigated, as well as between other socio-demographically defined groups.},
keywords = {},
pubstate = {published},
tppubtype = {phdthesis}
}
Even though on average Western countries are richer than ever before, an undercurrent of widespread discomfort and uncertainty has been revealed in recent years. This has led to renewed critical interest in the foundations and assumptions of the capitalist economic model. This thesis focuses on the role of inequality in the functioning of the economy. Specifically, three relationships are investigated. The first empirical chapter sets the general context, looking at the effect of economic freedom on (country-level) life satisfaction through income inequality. The second research chapter analyzes the effect of income inequality on trust and inequality in life satisfaction. The third and fourth chapters zoom in on the microeconomic level, discussing how national income inequality relates to individual life satisfaction, and to individual inclination to trust other people. In addition, the differences between different income groups are investigated, as well as between other socio-demographically defined groups. |
 | Graafland, Johan; Lous, Bjorn Income Inequality, Life Satisfaction Inequality and Trust: A Cross Country Panel Analysis Journal Article Journal of Happiness Studies, 20 (6), pp. 1717–1737, 2019, ISSN: 1573-7780. Abstract | Links | BibTeX @article{Graafland2019c,
title = {Income Inequality, Life Satisfaction Inequality and Trust: A Cross Country Panel Analysis},
author = {Johan Graafland and Bjorn Lous},
url = {https://doi.org/10.1007/s10902-018-0021-0},
doi = {10.1007/s10902-018-0021-0},
issn = {1573-7780},
year = {2019},
date = {2019-08-01},
journal = {Journal of Happiness Studies},
volume = {20},
number = {6},
pages = {1717--1737},
abstract = {Literature has argued that income inequality crowds out trust. However, whether income inequality makes people less trusting depends on how they perceive income inequality within their personal social context and social cognition. In this paper we therefore conjecture that the relationship of income inequality to trust depends on how income inequality affects inequality of life satisfaction. If life satisfaction inequality is high, distrust is generated among the least happy. This will increase polarization and the risk of rebellion, thereby also affecting trust among the happier people. Thus, life satisfaction inequality may be an essential factor in the relationship between income inequality and trust. In previous literature, the potential mediating role of life satisfaction inequality in the relationship between income inequality and social trust has not yet received attention. We test our model by panel analysis on 25 OECD countries in the period 1990--2014. The panel analysis shows that income inequality increases life satisfaction inequality and that both income inequality and life satisfaction inequality have a significant negative impact on social trust. Mediation tests show complementary mediation: besides the direct negative effect of income inequality on trust, we find an indirect effect mediated by life satisfaction inequality. This indirect effect counts for 20% of the total effect of income inequality on trust. Our results imply that policy options for increasing trust are not limited to countering income inequality, but can also include policy measures that directly reduce inequality of life satisfaction.},
keywords = {},
pubstate = {published},
tppubtype = {article}
}
Literature has argued that income inequality crowds out trust. However, whether income inequality makes people less trusting depends on how they perceive income inequality within their personal social context and social cognition. In this paper we therefore conjecture that the relationship of income inequality to trust depends on how income inequality affects inequality of life satisfaction. If life satisfaction inequality is high, distrust is generated among the least happy. This will increase polarization and the risk of rebellion, thereby also affecting trust among the happier people. Thus, life satisfaction inequality may be an essential factor in the relationship between income inequality and trust. In previous literature, the potential mediating role of life satisfaction inequality in the relationship between income inequality and social trust has not yet received attention. We test our model by panel analysis on 25 OECD countries in the period 1990--2014. The panel analysis shows that income inequality increases life satisfaction inequality and that both income inequality and life satisfaction inequality have a significant negative impact on social trust. Mediation tests show complementary mediation: besides the direct negative effect of income inequality on trust, we find an indirect effect mediated by life satisfaction inequality. This indirect effect counts for 20% of the total effect of income inequality on trust. Our results imply that policy options for increasing trust are not limited to countering income inequality, but can also include policy measures that directly reduce inequality of life satisfaction. |
 | Graafland, Johan; Lous, Bjorn Economic Freedom, Income Inequality and Life Satisfaction in OECD Countries Journal Article Journal of Happiness Studies, online first , pp. 1-23, 2017. Abstract | Links | BibTeX @article{Graafland2017,
title = { Economic Freedom, Income Inequality and Life Satisfaction in OECD Countries},
author = {Johan Graafland and Bjorn Lous},
doi = {10.1007/s10902-017-9905-7},
year = {2017},
date = {2017-08-12},
journal = {Journal of Happiness Studies},
volume = {online first},
pages = {1-23},
abstract = {Since \emph{Piketty’s Capital in the 21st Century} in 2014, scientific interest into the impact of income inequality on society has been on the rise. However, little is known about the mediating role of income inequality in the relationship between market institutions and subjective well-being. Using panel analysis on a sample of 21 OECD countries to test the effects of five different types of economic freedom on income inequality, we find that fiscal freedom, free trade and freedom from government regulation increase income inequality, whereas sound money decreases income inequality. Income inequality is found to have a negative effect on life satisfaction. Mediation tests show that income inequality mediates the influence of fiscal freedom, free trade and freedom from government regulation on life satisfaction. },
keywords = {},
pubstate = {published},
tppubtype = {article}
}
Since Piketty’s Capital in the 21st Century in 2014, scientific interest into the impact of income inequality on society has been on the rise. However, little is known about the mediating role of income inequality in the relationship between market institutions and subjective well-being. Using panel analysis on a sample of 21 OECD countries to test the effects of five different types of economic freedom on income inequality, we find that fiscal freedom, free trade and freedom from government regulation increase income inequality, whereas sound money decreases income inequality. Income inequality is found to have a negative effect on life satisfaction. Mediation tests show that income inequality mediates the influence of fiscal freedom, free trade and freedom from government regulation on life satisfaction. |
