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Attitudes towards Risk and Inequality: A Questionnaire-Experimental Approach

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Author Info
Yoram Amiel
Frank A Cowell

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Abstract

Orderings of income distribution in terms of inequality should be closely related to orderings in terms of risk. Using a novel mult-country questgionnaire experiment we examine the basis for this claim in terms of respondents' distributional perceptions. We show that in terms of both inequality and risk individuals consistently reject one of the standard axioms of distributional comparison. Moreover, there are significant differences in the 'maps' of inequality and risk comparisons. Rejection of the orthodox approach is less likely to occur when distributional comparisons involve extremes of the distributions.We show that certain key background variables are overwhelmingly important in predisposing individuals toward acceptance or rejection of the orthodox basis for distributional comparisons. This paper forms part of the research programme of the TMR network Living Standards, Inequality and Taxation [Contract No. ERBFMRXCT 980248] of the European Communities whose financial support is gratefully acknowledged.

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Publisher Info
Paper provided by Suntory and Toyota International Centres for Economics and Related Disciplines, LSE in its series STICERD - Distributional Analysis Research Programme Papers with number 56.

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Date of creation: Jun 2001
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Handle: RePEc:cep:stidar:56

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Web page: http://sticerd.lse.ac.uk/_new/publications/default.asp

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Related research
Keywords: Inequality; risk; experiment; transfer principle.;

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  1. Frank A Cowell & Guillermo Cruces, 2003. "Perceptions of Risk: an Experimental Approach using Internet Questionnaires," STICERD - Distributional Analysis Research Programme Papers 70, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE. [Downloadable!]
  2. Yoram Amiel & Frank A Cowell & Leima Davidovitz & Avraham Polovin, 2003. "Preference Reversals and the Analysis of Income Distributions," STICERD - Distributional Analysis Research Programme Papers 66, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE. [Downloadable!]
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  3. Yoram Amiel & Frank A Cowell & Wulf Gaertner, 2007. "Distributional Orderings: An Approach with Seven Flavours," STICERD - Distributional Analysis Research Programme Papers 93, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE. [Downloadable!]
  4. Yoram Amiel & Frank A Cowell & Wulf Gaertner, 2006. "To Be or not To Be Involved:A Questionnaire-Experimental View on Harsanyi’sUtilitarian Ethics," STICERD - Distributional Analysis Research Programme Papers 85, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE. [Downloadable!]
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