Credit Market Imperfection, Income Inequality, and Individual Happiness  

Oleh:

Vachadze, George

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: International Journal of Arts and Sciences vol. 06 no. 02 (2013), page 203-211.
Topik: Credit market imperfection; Elastic labor supply; Income inequality; Inequality and happiness
Fulltext: 06_02_16_Vachadze.pdf (481.72KB)

Isi artikel

Does income inequality always imply inequality in individual happiness? Or are rich and poor equally happy, despite their income differences? This paper presents a theoretical framework, in which one can address these questions. It is shown that the imperfection in the financial market can cause ex-ante homogeneous agents to choose different levels of labor supply in equilibrium, resulting in income inequality. Despite an endogenous diversity of ex-ante homogeneous agents’ income, ex-post heterogeneous agents achieve the same level of individual happiness. The relationship between income inequality and individual happiness can go in either direction. If labor productive is low enough then income inequality and individual happiness move in the same direction. In constracts, if labor productivity is at the intermediate level then income inequality and individual happiness move in the opposite direction. If labor productive is high enough then income inequality and individual happiness do not correlate at all.

Opini Anda

Klik untuk menuliskan opini Anda tentang koleksi ini!

Kembali