Happiness, Happiness Inequality and Income Dynamics in South Africa

  • Umakrishnan KollamparambilEmail author
Research Paper


This paper explores the trends and determinants in happiness and happiness inequality in South Africa at the individual and aggregate district municipality level using the four waves of National Income Dynamics data. The findings indicate that while both happiness as well as income levels show increasing trends in recent years, the inequality trends differ substantially between income and happiness measures. Despite increase in income inequality, South Africa has been registering decreased happiness inequality. The paper identifies the significant determinants of happiness and happiness inequality and finds that income determines happiness level as well as happiness inequality at both individual and aggregate level. The similarity of findings at the individual and aggregate levels indicate that the happiness–income paradox noted in literature does not seem to exist within the South African context. At the aggregate level, income inequality has significant negative and positive impact on happiness levels and happiness inequality respectively. Our finding of increasing happiness levels and decreasing happiness inequality in the backdrop of increasing income inequality, is indicative that absolute effect rather than relative effect of income dominates happiness and happiness inequality at the country level in South Africa. The paper’s findings reinforce the argument that happiness inequality may be a useful supplementary measure of inequality in society.


Happiness Happiness inequality Income inequality Income–happiness paradox South Africa 



  1. Becchetti, L., Massariy, R., & Naticchioniz, P. (2014). The drivers of happiness inequality: Suggestions for promoting social cohesion. Oxford Economic Papers, 66(2), 419–442. in 119 nations.CrossRefGoogle Scholar
  2. Berg, M., & Veenhoven, R. (2010). Income inequality and happiness in 119 nations. In search for an optimum that does not appear to exist. In B. Greve (Ed.), Social policy and happiness in europe, chapter 11 (pp. 174–194). Cheltenham: Edgar Elgar.Google Scholar
  3. Blaauw, D., & Pretorius, A. (2013). The determinants of subjective well-being in South Africa-an exploratory enquiry. Journal of Economic and Financial Sciences, 6(1), 179–194.Google Scholar
  4. Clark, A. E., Fleche, S., & Senik, C. (2012). The great happiness moderation. Paris: Paris-Jourdan Sciences Economiques.CrossRefGoogle Scholar
  5. Clark, P., Frijters, A. E., & Shields, M. A. (2008). Relative income, happiness, and utility: An explanation for the easterlin paradox and other puzzles. Journal of Economic Literature, 46(1), 95–144.CrossRefGoogle Scholar
  6. Delhey, J., & Kohler, U. (2011). Is happiness inequality immune to income inequality? New evidence through instrument-effect-corrected standard deviations. Social Science Research, 40(2011), 742–756.CrossRefGoogle Scholar
  7. Dolan, P., Peasgood, T., & White, M. (2008). Do we really know what makes us happy? A review of the economic literature on the factors associated with subjective well-being. Journal of Economic Psychology, 29(1), 94–122.CrossRefGoogle Scholar
  8. Dutta, I., & Foster, J. (2013). Inequality of happiness in the US: 1972–2010. Review of Income and Wealth, 59(3), 393–415.CrossRefGoogle Scholar
  9. Easterlin, R. A. (1995). Will raising the incomes of all increase the happiness of all?. Journal of Economc behaviour and Organisation, 27(1995), 35–47.CrossRefGoogle Scholar
  10. Easterlin, R. A., McVey, L. A., Switek, M., Sawangfa, O., & Zweig, J. S. (2010). The happiness–income paradox revisited. In PNAS December 28, 2010 107(52), pp. 22463–22468.Google Scholar
  11. Fahey, T., & Smyth, E. (2004). Do subjective indicators measure welfare? Evidence from 33 European societies. European Societies, 6(1), 5–27.CrossRefGoogle Scholar
  12. Firpo, S., Fortin, N., & Lemieux, T. (2009). Unconditional quantile regressions. Econometrica, 77(3), 953–973.CrossRefGoogle Scholar
  13. Gandelman, N., & Porzecanski, R. (2013). Happiness inequality: how much is reasonable? Social Indicators Research, 110(1), 257–269.CrossRefGoogle Scholar
  14. Helliwell, J. F., Huang, H., & Wang, S. (2017). The social foundations of world happiness. In R. J. Helliwell, R. Layard, & J. Sachs (Eds.), World happiness report 2017 (pp. 8–47). New York: Sustainable Development Solutions Network.Google Scholar
  15. Helliwell, J., Layard, R., & Sachs, J. (2018a). World happiness report 2018. New York: Sustainable Development Solutions Network.Google Scholar
  16. Helliwell, J. F., Huang, H., Wang, S., & Shiplett, H. (2018b). International migration and world happiness. In R. J. Helliwell, R. Layard, & J. Sachs (Eds.), World happiness report 2018 (pp. 13–44). New York: Sustainable Development Solutions Network.Google Scholar
  17. Hinks, T., & Gruen, C. (2007). What is the structure of South African happiness equations? Evidence from quality of life surveys. Social Indicators Research, 82(2), 311–336.CrossRefGoogle Scholar
  18. Huang, C. (2016). The impact of governance on happiness: Evidence from quantile regressions. International Scholarly and Scientific Research and Innovation, 10(7), 2543–2546.Google Scholar
  19. Kalmjin, W., & Veenhoven, R. (2005). Measuring inequality of Happiness in nations: In search for proper statistics. Journal of Happiness Studies, 6, 357–396.CrossRefGoogle Scholar
  20. Kollamparambil, U. (2017). Impact of internal in-migration on income inequality in receiving areas: A district level study of South Africa. The Journal of Development Studies, 53(12), 2145–2163.CrossRefGoogle Scholar
  21. Kollamparambil, U., & Mathentamo, Q. (2018). Determinants of happiness and happiness inequality in South Africa. In Conference paper annual African review of economics and finance, Johannesburg.Google Scholar
  22. Mahadea, D. (2013). On the economics of happiness: The influence of income and non-income factors on happiness. South African Journal of Economic and Management Sciences, 16(1), 39–51.CrossRefGoogle Scholar
  23. Mbewe, S., & Woolard, I. (2016). Cross-sectional features of wealth inequality in South Africa: Evidence from the national income dynamics study, SALDRU, Southern Africa Labour and Development Research Unit, Working Paper Number 185.Google Scholar
  24. Moller, V. (1998). Quality of life in South Africa: post-apartheid trends. Social Indicators Research, 43(1/2), 27–68.CrossRefGoogle Scholar
  25. Moller, V. (2007). Satisfied and dissatisfied South Africans: Results from the general household survey in international comparison. Social Indicators Research, 81, 389–415.CrossRefGoogle Scholar
  26. Newman, K. M. (2016). Happiness inequality is a better measure of well-being than income inequality. Yes! Magazine. Accessed 26 July 2017.
  27. Niimi, Y. (2018). What affects happiness inequality? Evidence from Japan. Journal of Happiness Studies, 19(2), 521–543.Google Scholar
  28. Ott, J. (2005). Level and inequality of happiness in nations: Does greater happiness of a greater number imply greater inequality in happiness? Journal of Happiness Studies, 6(4), 397–420.CrossRefGoogle Scholar
  29. Ovaska, T., & Takashima, R. (2010). Does a rising tide lift all the boats? Explaining the national inequality of happiness. Journal of Economic Issues, 44(1), 205–224.CrossRefGoogle Scholar
  30. Posel, D., & Casale, D. (2011). Relative standing and subjective well-being in South Africa: The role of perceptions. Expectations and Income Mobility, Social Indicators Research, 104, 195–223.CrossRefGoogle Scholar
  31. Southern African Labour and Development Research Unit. (2017). About SALDRU. Cape Town: SALDRU. Accessed 18 May 2017.
  32. Stevenson, B., & Wolfers, J. (2008). Happiness inequality in the United States. The Journal of Legal Studies, 37(2), 33–79.CrossRefGoogle Scholar
  33. Van Praag, B. (2011). Well-being inequality and reference groups: An agenda for new research. Journal of Economic Inequality, 9(1), 111–127.CrossRefGoogle Scholar
  34. Veenhoven, R. (1990). Inequality in happiness: Inequality in countries compared across countries. Munich: Munich Personal RePEc Archive.Google Scholar
  35. Veenhoven, R. (2005). Return of inequality in modern society? Test by dispersion of life-satisfaction across time and nations. Journal of Happiness Studies, 6(4), 457–487.CrossRefGoogle Scholar
  36. Wittenberg, M. (2017). Wages and wage inequality in South Africa 1994–2011: Part I-Wage measurement and trends. South African Journal of Economics, 85(2), 279–297.CrossRefGoogle Scholar

Copyright information

© Springer Nature B.V. 2019

Authors and Affiliations

  1. 1.School of Economic and Business SciencesUniversity of the WitwatersrandJohannesburgSouth Africa

Personalised recommendations