On the Measurement of Happiness and of its Inequality

Given that happiness or satisfaction with life is generally measured via an ordinal variable, the question arises as to how one should measure average happiness or satisfaction with life in a country, given that there is no arithmetic mean when dealing with ordinal variables. The same issue exists as far as deriving measures of inequality in happiness or in satisfaction with life is concerned, since traditional inequality indices cannot really be used with ordinal variables. The objective of this paper is to adopt recent suggestions made in the literature concerning the distribution of self-assessed health, an ordinal variable, and to propose new measures of the inequality in happiness or satisfaction with life and of the overall achievement in happiness or satisfaction with life. We apply the indices introduced in this literature and compare them with more traditional measures. Our empirical illustration is based on the World Values Surveys for the years 1995–98 (wave 3) and 2010–14 (wave 6), uses the data on satisfaction in life and covers 31 countries.