In standard New Economic Geography (NEG) models, individuals only concern themselves with their absolute consumption of goods. In recent years, the economic literatures on happiness and on preferences for redistribution have accumulated empirical evidences suggesting most individuals -and not only the poor- dislike consumption inequalities. In this paper, we introduce inequality aversion' in a NEG model with urban congestion costs. We find that it may generate either an agglomerative or a dispersive force, depending on the value of transport costs. However, if the degree of inequality aversion is high enough for a (national or decentralized) income transfer policy to be unanimously desired and implemented, then it strongly supports the economic agglomeration. In this case, social equality conflicts with spatial equality.