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A 'Leaky Bucket' in the Real World: Estimating Inequality Aversion using Survey Data

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  • JUKKA PIRTTIL�
  • ROOPE UUSITALO

Abstract

Existing evidence of inequality aversion relies on data from class-room experiments where subjects face hypothetical questions. This paper estimates the magnitude of inequality aversion using representative survey data, with questions related to the real-economy situations the respondents face. The results reveal that inequality aversion can be measured in a meaningful way using survey data, but the magnitudes of the estimates depend dramatically on how inequality aversion is measured. No matter how measured, the revealed inequality aversion predicts opinions on a wide range of questions related to the welfare state, such as the level of taxation, tax progressivity and the structure of unemployment benefits. Copyright (c) The London School of Economics and Political Science 2008.

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Bibliographic Info

Article provided by London School of Economics and Political Science in its journal Economica.

Volume (Year): 77 (2010)
Issue (Month): 305 (01)
Pages: 60-76

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Handle: RePEc:bla:econom:v:77:y:2010:i:305:p:60-76

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  1. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
  2. Alberto Alesina & George-Marios Angeletos, 2004. "Fairness and Redistribution," NajEcon Working Paper Reviews 122247000000000306, www.najecon.org.
  3. Corneo, Giacomo & Grüner, Hans Peter, 2001. "Individual Preferences for Political Redistribution," CEPR Discussion Papers 2694, C.E.P.R. Discussion Papers.
  4. Carlsson, Fredrik & Daruvala, Dinky & Johansson-Stenman, Olof, 2001. "Are People Inequality Averse Or Just Risk Averse?," Working Papers in Economics 43, University of Gothenburg, Department of Economics.
  5. Barsky, Robert B, et al, 1997. "Preference Parameters and Behavioral Heterogeneity: An Experimental Approach in the Health and Retirement Study," The Quarterly Journal of Economics, MIT Press, vol. 112(2), pages 537-79, May.
  6. Ahmad, Ehtisham & Stern, Nicholas, 1984. "The theory of reform and indian indirect taxes," Journal of Public Economics, Elsevier, vol. 25(3), pages 259-298, December.
  7. Robert B. Barsky & Miles S. Kimball & F. Thomas Juster & Matthew D. Shapiro, 1997. "Preference Parameters and Behavioral Heterogeneity: An Experimental Approach in the Health and Retirement Survey," NBER Working Papers 5213, National Bureau of Economic Research, Inc.
  8. Dirk Engelmann & Martin Strobel, 2004. "Inequality Aversion, Efficiency, and Maximin Preferences in Simple Distribution Experiments," American Economic Review, American Economic Association, vol. 94(4), pages 857-869, September.
  9. Christiansen, Vidar & Jansen, Eilev S., 1978. "Implicit social preferences in the Norwegian system of indirect taxation," Journal of Public Economics, Elsevier, vol. 10(2), pages 217-245, October.
  10. Yoram Kroll & Liema Davidovitz, 2003. "Inequality Aversion versus Risk Aversion," Economica, London School of Economics and Political Science, vol. 70(277), pages 19-29, February.
  11. Amiel, Yoram & Creedy, John & Hurn, Stan, 1999. " Measuring Attitudes towards Inequality," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(1), pages 83-96, March.
  12. Tito Boeri & Axel Börsch-Supan & Guido Tabellini, 2001. "Would you like to shrink the welfare state? A survey of European citizens," Economic Policy, CEPR & CES & MSH, vol. 16(32), pages 7-50, 04.
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Cited by:
  1. Rafael Salas & Juan Rodríguez, 2013. "Popular support for social evaluation functions," Social Choice and Welfare, Springer, vol. 40(4), pages 985-1014, April.
  2. Yamamura, Eiji, 2011. "Effect of social capital on income distribution preferences: comparison of neighborhood externality between high- and low-income households," MPRA Paper 32557, University Library of Munich, Germany.
  3. Glenn Sheriff & Kelly B. Maguire, 2013. "Ranking Distributions of Environmental Outcomes Across Population Groups," NCEE Working Paper Series 201304, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Aug 2013.
  4. Aristei, David & Perugini, Cristiano, 2010. "Preferences for redistribution and inequality in well-being across Europe," Journal of Policy Modeling, Elsevier, vol. 32(2), pages 176-195, March.
  5. Gaston, Noel & Rajaguru, Gulasekaran, 2013. "International migration and the welfare state revisited," European Journal of Political Economy, Elsevier, vol. 29(C), pages 90-101.
  6. Alexandru Cojocaru, 2011. "Inequality and well-being in transition economies: A non-experimental test of inequality aversion," Working Papers 238, ECINEQ, Society for the Study of Economic Inequality.
  7. Schnellenbach, Jan, 2012. "The economics of taxing net wealth: A survey of the issues," Freiburg Discussion Papers on Constitutional Economics 12/5, Walter Eucken Institut e.V..

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