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Journal of Happiness Studies
Published in: Journal of Happiness Studies 2/2011

01-04-2011

A Different Rationale for Redistribution: A Comment

Author: Christian Bjørnskov

Published in: Journal of Happiness Studies | Issue 2/2011

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Excerpt

John Cullis, John Hudson and Philip Jones (2009) set out to provide an answer for an old question: Is there a role for redistribution to increase average happiness? First, they start by outlining a more modern, advanced version of the piece of economic theory sometimes referred to as the ‘Lerner argument’, a simple version of which was first brought forward by Abba Lerner (1944). This careful outline of modern theory, including effects arising out of individual peer-group comparisons, suggests a clear rationale for redistribution through progressive taxation and regressive transfers. …
previous article A Different Rationale for Redistribution: Pursuit of Happiness in the European Union
next article A Different Rationale for Redistribution: A Reply to Bjørnskov

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Footnotes
1
Cullis et al. claim that both Luxembourg and Denmark are outliers. However, studies including social trust as an explanatory variable show that it is the extreme Danish trust score that accounts for its higher level of happiness. As this effect is included in the fixed effects in Cullis et al., the trust difference inflates the Danish fixed effect to the extent that it looks like an outlier. However, as trust is not caused by income, this is not relevant to the redistribution exercise.
 
2
To keep this comment short, the estimates are not reported. However, a set of fixed effects generalized least squares estimates—that by definition of fixed effects rely on the intra-country development—document a linear association. These results are available from the author on the request.
 
3
Fitting a model of autoregressive conditional heteroscedasticity (ARCH) actually reveals that while a significant shift in average happiness occurred with the 1985 accession round, the income dispersion is significantly positively associated with average happiness.
 
Literature
Bjørnskov, C., Datta Gupta, N., & Pedersen, P. J. (2008). Analyzing trends in subjective well-being in 15 European countries, 1973–2002. Journal of Happiness Studies, 9, 317–330.CrossRef
Cullis, J., Hudson, J., & Jones, P. (2009). A different rationale for redistribution: pursuit of happiness in the European Union. Journal of Happiness Studies, this issue.
Easterlin, R. A. (2001). Income and happiness: Towards a unified theory. The Economic Journal, 111, 465–484.CrossRef
Frey, B., & Stutzer, A. (2002). Happiness and economics: How the economy and institutions affect human well-being. Princeton: Princeton University Press.
Layard, R. (2005). Happiness: Lessons from a new science. London: Penguin.
Lerner, A. P. (1944). The economics of control: Principles of welfare economics. New York: MacMillan.
Napier, J. L., & Jost, J. T. (2008). Why are some conservatives happier than liberals? Psychological Science, 19, 565–572.CrossRef
Schwarze, J., & Härpfer, M. (2007). Are people inequality averse, and do they prefer redistribution by the state? Evidence from German longitudinal data on life satisfaction. Journal of Socio-Economics, 36, 233–249.CrossRef
Stutzer, A. (2004). The role of income aspirations in individual happiness. Journal of Economic Behavior & Organization, 54, 89–109.CrossRef
Metadata
Title
A Different Rationale for Redistribution: A Comment
Author
Christian Bjørnskov
Publication date
01-04-2011
Publisher
Springer Netherlands
Published in
Journal of Happiness Studies / Issue 2/2011
Print ISSN: 1389-4978
Electronic ISSN: 1573-7780
DOI
https://doi.org/10.1007/s10902-010-9192-z

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