Abstract
This research uses nationally representative data to study how economic resources and inequalities are associated with life satisfaction of Chinese residents. We construct economic resource and inequality measures from expenditure rather than from income, after confirming that expenditure inequality is a better measure in the Chinese context. We find that economic inequalities in general are negatively associated with life satisfaction, and that this association is larger for inequalities in the lower half of the distribution than those in the upper half of the distribution. We further explore the mechanisms under which inequality can be associated with life satisfaction, and find that aspiration is potentially one important channel.
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Notes
Tibet, Qinghai, Xinjiang, Ningxia, Inner Mongolia, Hainan, Hong Kong, and Macao were not included.
Our results are robust to alternative formulations of the dependent variables and different empirical strategies.
We thank an anonymous referee for this suggestion.
To save space we present subsample estimation results for Gini coefficients only. Estimations using other inequality measures are similar and are available upon request.
We thank an anonymous referee for suggesting this estimation, and the results are available upon request.
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Acknowledgements
This research is supported by grants from the National Institute on Aging, the Natural Science Foundation and Tianjin Social Science Foundation (ZX20160145). Thanks to the editor and anonymous reviewers for their very helpful comments.
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Lei, X., Shen, Y., Smith, J.P. et al. Life satisfaction in China and consumption and income inequalities. Rev Econ Household 16, 75–95 (2018). https://doi.org/10.1007/s11150-017-9386-9
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DOI: https://doi.org/10.1007/s11150-017-9386-9