Income comparison and happiness: The role of fair income distribution Academic Article uri icon


  • AbstractRelative income gap is one of the most popular approaches for explaining the incomehappiness relationship. We argue in this article that when people compare their incomes, they care about distributional fairness more than relative income disparity. It is difficult for us to explain China's incomehappiness paradox if we simply compare the income gap and do not explore the incomegeneration process leading to income inequality. We therefore employ an approach based on a responsibilitysensitive theory of justice that decomposes individual income into fair and unfair components. As a proxy for distributional unfairness, unfair income is considered the main source of unhappiness. Using data from the Chinese Household Income Project survey, we find strong support for the negative relationship between income unfairness and happiness. We also find a significantly positive relationship between the relative income gap and income unfairness, which leads us to consider the income comparison hypothesis as the explanation for the incomehappiness paradox in a new light. Sensitivity analyses confirm the robustness of our results.

published proceedings


author list (cited authors)

  • Chen, Y., Fu, D., & Ye, X.

citation count

  • 1

complete list of authors

  • Chen, Yongwei||Fu, Dahai||Ye, Xinyue

publication date

  • March 2021