| Promoting people's happiness is the ultimate purpose of economic development and public policy. However, although the Chinese economy has been growing quite rapidly during the past decades'of economic and social transition, the happiness of Chinese residents fails to keep up with the high growth rate. This is called the "Easterlin Paradox", which refers to the phenomenon that growth of output per capita does not bring the same growth of the happiness of the population.What caused the "Easterlin Paradox" in China? While the existing explanation mainly ascribe this paradox to the high income gap, this intuition is not so clear in relevant academic studies. On the one hand, theoretical analysis suggests that income gap can either promote people's happiness through the "tunnel effect", or hurt it through the "relative deprivation effect". On the other hand, empirical studies also obtain clouding results concerning the relationship between income inequality and people's happiness.This thesis contributes to the above debate by introducing "opportunity inequality" into the analysis on income gap and happinesss. It emphasizes that the sole focus on "outcome inequality" instead of "opportunity inequality" is the main reason for the existing contradictory conclusions. This paper is thus aimed at explaining the "Easterlin Paradox" in China from the perspective of "opportunity inequality". The main contents and conclusions are as follows:Firstly, this paper does a thorough literature review, so as to answer three important and crossly related questions:(1) How to measure happiness? (2) What are the major factors influencing people's happiness? (3) Is it reasonable to use happiness index as a target for public policy?Secondly, this paper analyzes the general trend and determinant of Chinese residents'happiness, as well as the differences between different groups. The results suggests:(1) Generally speaking, the level of Chinese residents'happiness flucuates in the past two decades, with no obvious descending or ascending trend. (2) Having higher income and education level, being female, married or CPC member, and living in the rural area all have a positive effect on happiness. Meanwhile, the relationship between age and happiness shows a significant "U" type, with 50 being the turning point. (3) The determinant of Chinese residents'happiness is similar with those of other countries. (4) Economic growth has no significant impact on people's happiness. While openness and market process can slightly improve people's happiness, income gap and corruption will significantly hurt residents'happiness.Thirdly, this paper analyzes the time trend of Chinese income inequality, with the main conclusion being that the general Gini Coefficient, as well as the Gini Coefficient in and among the rural and urban area are all increasing. By using the non-paramatric method proposed by Ferreira and Gignoux (2011), this paper also calculates the degree of opportunity inequality in China, which shows about 18.7% of the total income inequality, can be explained by opportunity inequality.Fourthly, this paper proposes four theoretical hypothesis which provide the foundation for the following empirical studies. (1) Opportunity inequality is an important factor that harms Chinese residents'happiness. (2) Absolute income inequality also has a negative effect on happiness. (3) The negative impact of income inequality on happiness is larger for the low-income group. (4) The negative impact of opportunity inequality on happiness is larger for the socially and economically disadvantaged groups.Fifthly, this paper calculates the "objective opportunity inequality index" in China, so as to verify the above hypothesis from the perspective of "objective feelings'. The results suggest:(1) Opportunity inequality has a negative impact on people's happiness, and this impact is more serious for the low-income group and rural residents. (2) Income inequality also has a negative influence on people's happiness. (3) The main factors affecting people's tolerance for opportunity inequality include income level, educational level, Hukou and CPC membership.Sixthly, this paper designs three objective variables reflecting the opportunity inequality in China, so as to verify the above hypothesis from the perspective of "success controllability". Latent personalities are also included in the model, which make the results much more robust. The results suggest:(1) Opportunity inequality has a significantly negative impact on people's happiness. (2) The explaining power of personality on happiness is quite strong. Being Openness, Conscientiousness, Emotional Stability and Extraversion will all improve happiness, while being Agreeableness will do harm on one's happiness.Seventhly, by using the empirical method proposed by Ferreira and Gignoux (2011), this paper decomposes the total income inequality into two parts, including the "opportunity inequality" and "effort inequality", so as to verify the above hypothesis from the perspective of "subjective inequality". The results suggest:(1) Opportunity inequality has a significantly negative impact on people's happiness. (2) The impact of "effort inequality" is not significant. (3) Total income inequality has a significant negative impact on happiness. (4) Opportunity inequality hurts the happiness of low-income group, rural Hukou residents, non-CPC member and low-education group more than other groups.Eighthly, this paper points out that the opportunity inequality in China stems from the improper institutions which need to be further improved, including the fiscal decentralization, urban-biased economic institution, as well as the imperfect market system.Finally, based on all the above analysis, this paper proposed a happiness-oriented policy solution. The main suggestions include ensuring opportunity equality, improving the income distribution system, changing the economic growth mode and building a well-rounded power supervision system.In conclusion, this paper will benefit our understanding of the welfare meaning of income inequality, as well as the degree and institutional sources of the opportunity inequality in China. This will help us to design a happiness-oriented public policy and finally realize the co-growing of both output and happiness. The above analysis is also a sound contribution to the happiness economics in the developing countries.
|
PDF Full Text Request