Income Inequality, Distributive Justice Beliefs, and Happiness in China: Evidence from a Nationwide Survey

Abstract

Recently, increasing numbers of scholars have given attention to the mechanism connecting income inequality and happiness. This paper uses a multilevel model to verify the effect of income inequality at the city level on happiness and its moderating effect in China. It is found that income inequality is highly correlated to individual happiness. In the context of the transition China, people are inclined to report more happiness in places where income inequality is lower, after controlling for a number of demographic variables and economic factors. Moreover, this negative effect is relatively robust and significant, regardless of estimates with different covariates. It is worth noting that personal distributive justice beliefs play a momentous role in happiness. Specifically, as an effective social psychological mechanism, they can alleviate the negative effects of income inequality on happiness. A vital implication of the findings for social policy is that the model of economic development should be based on equity and justice and become a consistent source of happiness in this transitional period in China.