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Out of sight, out of mind? Income inequality proximity and happiness in urban Mexico

Cobos Cabral, Francisco LU (2025) EKHS22 20251
Department of Economic History
Abstract
Income inequality is typically assumed to be a societal problem. Yet, empirical evidence remains inconclusive on whether inequality reduces individuals’ well-being or not. This study uses data on national-, state-, and city-level inequality measures in Mexico to observe how these relate to changes in self-reported well-being across 12 years. The analysis reveals that the relationship between happiness and inequality depends on the geographical level at which inequality is measured and can be mediated by individuals’ income. National income inequality is negatively associated with life satisfaction in Mexico, although the rich are considerably less affected by it. On the other hand, state-level and city-level inequality are not... (More)
Income inequality is typically assumed to be a societal problem. Yet, empirical evidence remains inconclusive on whether inequality reduces individuals’ well-being or not. This study uses data on national-, state-, and city-level inequality measures in Mexico to observe how these relate to changes in self-reported well-being across 12 years. The analysis reveals that the relationship between happiness and inequality depends on the geographical level at which inequality is measured and can be mediated by individuals’ income. National income inequality is negatively associated with life satisfaction in Mexico, although the rich are considerably less affected by it. On the other hand, state-level and city-level inequality are not significantly related to life satisfaction for either income group. These relationships are maintained after being tested simultaneously, implying that each proximity level of inequality captures an independent effect on life satisfaction. This may indicate that the mechanisms driving the inequality-happiness relationship are different depending on the geographical level at which inequality is observed. Concretely, the findings suggest that the positive effects of inequality are more likely to be experienced for inequalities at closer proximity levels. This calls for increased nuance and theoretical consideration when measuring the effects of inequality on individuals’ well-being. (Less)
Please use this url to cite or link to this publication:
author
Cobos Cabral, Francisco LU
supervisor
organization
course
EKHS22 20251
year
type
H2 - Master's Degree (Two Years)
subject
keywords
income inequality, happiness, wellbeing, Mexico, life satisfaction, geographical proximity, multilevel
language
English
id
9195658
date added to LUP
2025-06-16 11:43:46
date last changed
2025-06-16 11:43:46
@misc{9195658,
  abstract     = {{Income inequality is typically assumed to be a societal problem. Yet, empirical evidence remains inconclusive on whether inequality reduces individuals’ well-being or not. This study uses data on national-, state-, and city-level inequality measures in Mexico to observe how these relate to changes in self-reported well-being across 12 years. The analysis reveals that the relationship between happiness and inequality depends on the geographical level at which inequality is measured and can be mediated by individuals’ income. National income inequality is negatively associated with life satisfaction in Mexico, although the rich are considerably less affected by it. On the other hand, state-level and city-level inequality are not significantly related to life satisfaction for either income group. These relationships are maintained after being tested simultaneously, implying that each proximity level of inequality captures an independent effect on life satisfaction. This may indicate that the mechanisms driving the inequality-happiness relationship are different depending on the geographical level at which inequality is observed. Concretely, the findings suggest that the positive effects of inequality are more likely to be experienced for inequalities at closer proximity levels. This calls for increased nuance and theoretical consideration when measuring the effects of inequality on individuals’ well-being.}},
  author       = {{Cobos Cabral, Francisco}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Out of sight, out of mind? Income inequality proximity and happiness in urban Mexico}},
  year         = {{2025}},
}