Effects of objective and subjective indicators of economic inequality on subjective well‐being: Underlying mechanisms

Abstract

Abstract Much research found that economic inequality—the dispersion of incomes distribution among individuals in a society—affects subjective well‐being (SWB). As a meta‐analysis has shown, the association between economic inequality, commonly measured by the Gini index, and individuals' SWB is weak and not significant. Psychosocial research suggests that the situational perception, rather than objective reality, has a greater impact on individuals. Our aim was to investigate whether and how objective and subjective measures of economic inequality affect the subjective individuals' well‐being, both in its affective and cognitive components. A representative Italian sample ( N = 1446, 51% women; average age = 42.42 years, SD = 12.87) answered an online survey. Multilevel regressions detected a negative and significant effect of the inequality perception on well‐being. In contrast, the Gini index showed no effect. Two psychological mechanisms explain the association between perceived inequality and well‐being: Perceived anger toward inequality and individuals' economic vulnerability. The parallel mediation models showed that the effect of perceived inequality is conveyed by cognitive (economic vulnerability) and emotional (anger) processing of inequality. Findings also highlighted the role of the ongoing COVID‐19 pandemic.