The Relationship Between Subjective Wellbeing and Subjective Wellbeing Inequality: Taking Ordinality and Skewness Seriously

• Inequality of subjective wellbeing (SWB) matters for individual SWB outcomes.

• The estimated effects of this relationship depend on how inequality is measured.

• In addition to inequality, the skewness (asymmetry) of the SWB distribution also matters for individual SWB outcomes.

• Whether one looks upwards (at those above themselves) or downwards (at those below) also affects the estimated relationship between inequality and individual SWB outcomes.

Objectives/ Research question
We examine the relationship between SWB inequality and individual SWB outcomes across countries and across time.

Methods
We use nine separate measures of inequality that differ in their suitability for ordinal (Likert scale) data to examine the relationship between SWB inequality and individual SWB outcomes.

Results
Measures based on cardinal data do not show a relationship between individual SWB outcomes and measured SWB inequality of a country once other factors are controlled for.
Theoretically preferred measures of inequality using ordinal data do show a relationship between individual SWB outcomes and measured SWB inequality.
These measures also show that the skewness of the SWB distribution, and whether one looks upwards or downwards at the distribution, affect individual SWB outcomes.

Conclusions
When using Likert scale data, researchers should use measures of inequality that are suitable for ordinal data.

Summary haiku

Inequality
and skewness of wellbeing
matter for people

DOI: doi.org/10.29310/WP.2020.09

Citation

Grimes, Arthur, Stephen Jenkins and Florencia Tranquilli. 2020. "The Relationship between Subjective Wellbeing and Subjective Wellbeing Inequality: Taking Ordinality and Skewness Seriously." Motu Working Paper 20-09. Motu Economic and Public Policy Research. Wellington, New Zealand.