And Layard (2005) argues that, if money is transferred from a richer person to a poorer person, the poor person gains more happiness than the rich person loses. Therefore:
… a country will have a higher level of average happiness the more
equally its income is distributed.
(Layard, 2005, p. 52)
Up to a certain point: as Layard’s thesis rests upon the fact that above a certain point money does not increase happiness, or not enough that we can measure it, there must be an upper limit to the level of income we should redistribute to. In his writings Layard appears to claim that it’s about $15,000 a year or at current exchange rates, some £2.50 a year or, when he was writing, some £8,000 a year. Thus this increase in happiness does not occur when the recipient is getting more than that sum a year.
Which leads to a really rather interesting thought. The current poverty level is 60% of median: which is I think some £16 k a year? Thus the poverty level of 60% is £ 9,600….meaning that we have already defined poverty as being above the level at which we can maximise societal happiness through redistribution.
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