Beiträge zur Jahrestagung des Vereins für Socialpolitik 2014: Evidenzbasierte Wirtschaftspolitik - Session: Welfare Economics F07-V2
This paper analyzes the e ffect of regional income inequality within countries on individual life satisfaction. We use data from the World Values Survey (WVS) and the European Values Survey (EVS) containing approximately 97,000 observations from 1981-2008. Regional income inequality is measured by the coeffi cient of variation of regional GDP per capita. We find that higher regional income inequality leads to lower life satisfaction in OECD countries. In non-OECD countries, we find no signifi cant e ffect. This may be related to the higher dynamics of regional inequality in middle and low income countries, where people still hope to participate in income increases in the future, while regional inequality is persistent in high income countries.