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What matters more: the greatest overall happiness, or the happiness of the greatest number? This question has concerned philosophers for centuries.

It is easier to talk about income differences (inequality) then about more subjective items as feelings about happiness.

Most conversations about development these days focus on income inequality and people’s wellbeing. But analysis suggests these conversations might be better focused on the inequality in people’s wellbeing. There are three reasons for that:

  1. Polarization

Data show that worldwide, with every passing year since the Great Recession, life has gotten better for people with wellbeing scores in the top 20% and worse for people with wellbeing scores in the bottom 20%.

2. Holistic metrics

Measuring inequality through a subjective wellbeing metric such as life evaluation allows each respondent to consider all the issues of their life that are important to them and to factor them into their rating accordingly. Income inequality, on the other hand, looks at only one component of what is important to people.

3. Psychological

Importantly, this inequality is associated with lower levels of happiness for citizens, while there is evidence regarding the psychological nature of this relationship. Central mechanisms that explain the link between income inequality and subjective well-being, including anxiety from status competition, mistrust, and hopes and fears about the future.

wellbeing inequality may tell us more about life itself, than income

There are at least two ways in which to examine inequalities in wellbeing: inequalities between groups of people (e.g. according to gender or income groups), and inequality in overall wellbeing of the population.

The growing inequality in how people rate their lives shows millions of people are clearly being left behind. But more than that, the widening gap in how people rate their lives may be able to provide a better, more complete picture of inequality in a country than income inequality alone.

While studying national averages illustrates important differences between countries, to gain a greater understanding of wellbeing inequality it is important to analyze differences within countries. This is why more and more political leaders are taking Wellbeing Inequality into account.

New Zealand Prime Minister Jacinda Ardern announced plans to include the wellbeing of New Zealanders as a measure of her country’s economic success.

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