LAUSR

In the context of the recent emergence of enormous research and policy interest in the many dimensions of happiness, this paper explores for the first time a Kuznets-type relation between average happiness and happiness-inequality in a large cross-country setting. Three different data sets and several types of specifications are used. The study suggests three main points. First, in all cases there is a clear indication of an inverted-U relation in which happiness-inequality first increases with mean happiness, reaches a peak, and then declines. Moreover, the estimated turning-point occurs at a fairly "late" stage, and 35% to 40% of the countries lie in the increasing-inequality segment. Second, a possible policy implication is that there may be need to address accentuation of happiness-inequality at early stages of increase in average happiness. Third, the estimates indicate that the predominant sentiment in the literature toward a negative relation between mean happiness and happiness-inequality is probably based on oversimplified linear models.