The social evaluation of income distribution: An assessment based on happiness surveys

The paper investigates how the income distribution affects the subjective well-being of society. Starting from the concept of a social welfare function defined on income distributions it assesses the preference for equality in European countries. It examines how mean income and the distribution of income in a country (measured by an appropriate inequality measure) determine the subjective well-being of its inhabitants which is identified with social welfare. This issue is addressed under alternative assumptions concerning the adjustment of needs due to differences in household size. The results derived are relevant for the design and monitoring of redistribution policies.