It does indeed seem to be a determinant of lots of things that go into "general happiness".
A comparative study of homicide in Canada and the US has found that higher income inequality is one of the factors that correlates most closely with higher rates of homicide:
http://www.science.mcmaster.ca/Psychology/dalywilson/iiahr2001.pdfa review of
Daly, Wilson, & Vasdev, Income inequality and homicide rates in Canada and the United States, Canadian Journal of Criminology, April 2001: 219-236
http://www.ccja-acjp.ca/en/cjc43a2.htmlPrevious research showing that income inequality (assessed by the Gini index) is a predictor, and hence a possible determinant, of homicide rates, whether at the cross-national, state or city level, has been inconclusive because of a negative relationship between economic inequity and average income. Comparison across the Canadian provinces provides a test case in which average income and the Gini are instead positively correlated, and we find that the positive relationship between the Gini and the homicide rate is undiminished. Temporal change in the Gini is also shown to be a significant predictor of temporal change in provincial homicide rates. When Canadian provinces and U.S. states are considered together, local levels of income inequality appear to be sufficient to account for the two countries' radically different national homicide rates.
(Of course, higher income equality also tends to correlate closely with stricter firearms controls ... .)
Could it be that this general unhappiness and feeling of unease actually helps contribute to physical illness? For quite some time it has been theorized in medical circles that perhaps the mind plays more of a role in physical well-being than almost any external force.I suspect it's less ethereal than that. (And remember, a recent study found that "positive attitude" had no positive, and possibly a negative, effect on cancer patients' outcomes.)
Where income disparities are greatest, generally the rich just aren't richer, the poor really are poorer. It can be hard to separate the effects of poverty from the effects of income disparity. And poverty is about the best predictor of ill health and shortened life expectancy that there is.
But income disparity does seem to be more closely correlated with numerous outcomes than levels of poverty itself. It's a funny thing -- it's an excellent predictor, but it's really hard to explain what the cause-and-effect relationship might be!
This is just a bit of a kick, too, because that L.A. Times article is really worth reading.
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