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More Income Equality or Not? An Empirical Analysis of Individuals’ Preferences

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Author Info
María A. García-Valiñas
Roberto Fernández Llera
Benno Torgler

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Abstract

Do people prefer a society with an extensive social welfare system with high taxes, or low taxes but lax redistributive policies? Although economists have for a long time investigated the trade-off mechanism between equity and efficiency, surprisingly little information is available about citizens’ preferences over the distribution of income in a society. The aim of this paper is reduce this shortcoming, investigating in an empirical study working with World Values Survey, what shapes individuals’ preferences for income equality in Spain. We present evidence that not only traditional economic variables are relevant to be considered, but also factors such as ideology, political interest, fairness perception about others or trust in institutions, are key determinants to understand preferences towards redistribution and equality.

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Paper provided by Center for Research in Economics, Management and the Arts (CREMA) in its series CREMA Working Paper Series with number 2005-23.

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Date of creation: Jul 2005
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Handle: RePEc:cra:wpaper:2005-23

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Related research
Keywords: redistribution inequality welfare state social capital

Find related papers by JEL classification:
H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
I31 - Health, Education, and Welfare - - Welfare and Poverty - - - General Welfare

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References listed on IDEAS
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  1. Giacomo Corneo & Hans Peter Gruner, 2000. "Social Limits to Redistribution," American Economic Review, American Economic Association, vol. 90(5), pages 1491-1507, December. [Downloadable!] (restricted)
  2. Louis Putterman & John E. Roemer & Joaquim Silvestre, 1998. "Does Egalitarianism Have a Future?," Journal of Economic Literature, American Economic Association, vol. 36(2), pages 861-902, June. [Downloadable!] (restricted)
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  3. Alberto Alesina & Eliana La Ferrara, 2000. "Participation In Heterogeneous Communities," The Quarterly Journal of Economics, MIT Press, vol. 115(3), pages 847-904, August. [Downloadable!] (restricted)
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  4. David M. Cutler & Edward L. Glaeser & Jacob L. Vigdor, 1999. "The Rise and Decline of the American Ghetto," Journal of Political Economy, University of Chicago Press, vol. 107(3), pages 455-506, June. [Downloadable!] (restricted)
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  5. Corneo, Giacomo & Gruner, Hans Peter, 2002. "Individual preferences for political redistribution," Journal of Public Economics, Elsevier, vol. 83(1), pages 83-107, January. [Downloadable!] (restricted)
  6. Alesina, Alberto & Baqir, Reza & Easterly, William, 1999. "Public goods and ethnic divisions," Policy Research Working Paper Series 2108, The World Bank. [Downloadable!]
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  7. Alberto Alesina & Reza Baqir & Caroline Hoxby, 2000. "Political Jurisdictions in Heterogeneous Communities," NBER Working Papers 7859, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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