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Inequality and Public Good Provision: An Experimental Analysis

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Author Info

  • Lisa R. Anderson

    ()
    (Department of Economics, College of William and Mary)

  • Jennifer M. Mellor

    ()
    (Department of Economics, College of William and Mary)

  • Jeffrey Milyo

    ()
    (Department of Economics and Truman School of Public Affairs, University of Missouri)

Abstract

Recent studies report that economic inequality is associated with reduced government expenditures on social programs. Several prominent social scientists, including Putnam [2000], attribute this relationship to the detrimental Òpsychosocial effectsÓ of group heterogeneity on cooperation. We test the hypothesis that inequality within a group reduces individual contributions in a canonical public goods experiment. Unlike previous examinations of inequality and public good provision, our design introduces inequality by manipulating the levels and distributions of fixed payments given to subjects for participating in the experiment. When made salient through public information about each individualÕs standing within the group, inequality in the distribution of fixed payments reduces contributions to the public good for all group members.

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Bibliographic Info

Paper provided by Department of Economics, College of William and Mary in its series Working Papers with number 12.

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Length: 42 pages
Date of creation: 15 Dec 2004
Date of revision:
Handle: RePEc:cwm:wpaper:12

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Keywords: Inequality; Heterogeneity; Cooperation; Public goods; Experiments;

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References

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Citations

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Cited by:
  1. Agathe Rouaix & Charles Figuières & Marc Willinger, 2013. "The trade-off between welfare and equality in a public good experiment," Working Papers 13-03, LAMETA, Universtiy of Montpellier, revised Feb 2013.
  2. Nadine Riedel & Hannah Schildberg-Hoerisch, 2011. "Asymmetric Obligations," Working Papers 1110, Oxford University Centre for Business Taxation.
  3. Lindqvist, Erik & Östling, Robert, 2006. "Political Polarization and the Size of Government," Working Paper Series in Economics and Finance 628, Stockholm School of Economics, revised 02 Jul 2007.
  4. Guererk, Oezguer & Rockenbach, Bettina & Wolff, Irenaeus, 2010. "The effects of punishment in dynamic public-good games," MPRA Paper 22097, University Library of Munich, Germany.
  5. DeAngelo, Gregory & Brosnan, Sarah F., 2013. "The importance of risk tolerance and knowledge when considering the evolution of inequity responses across the primates," Journal of Economic Behavior & Organization, Elsevier, vol. 90(S), pages S105-S112.
  6. Smith, Alexander, 2011. "Group composition and conditional cooperation," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(5), pages 616-622.
  7. Visser, Martine & Burns, Justine, 2006. "Bridging the Great Divide in South Africa: Inequality and Punishment in the Provision of Public Goods," Working Papers in Economics 219, University of Gothenburg, Department of Economics.
  8. Luca Corazzini & Marco Faravelli & Luca Stanca, 2010. "A Prize To Give For: An Experiment on Public Good Funding Mechanisms," Economic Journal, Royal Economic Society, vol. 120(547), pages 944-967, 09.
  9. Róbert F. Veszteg & Erita Narhetali, 2010. "Public-good games and the Balinese," International Journal of Social Economics, Emerald Group Publishing, vol. 37(9), pages 660-675, September.
  10. Shoji, Masahiro & Aoyagi, Keitaro & Kasahara, Ryuji & Sawada, Yasuyuki, 2010. "Motives behind Community Participation," Working Papers 16, JICA Research Institute.
  11. Neslihan Uler, 2011. "Public goods provision, inequality and taxes," Experimental Economics, Springer, vol. 14(3), pages 287-306, September.
  12. Kesternich, Martin & Lange, Andreas & Sturm, Bodo, 2012. "The impact of burden sharing rules on the voluntary provision of public goods," ZEW Discussion Papers 12-033, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  13. Alexander Smith, 2010. "Group Composition and Conditional Cooperation," Working Papers 2010-11, Department of Economics, University of Calgary, revised 19 Jan 2010.
  14. Zoe Van der Hoven & Martine Visser & Kerri Brick, 2012. "Contribution Norms in Heterogeneous Groups: A Climate Change Framing," SALDRU Working Papers 77, Southern Africa Labour and Development Research Unit, University of Cape Town.
  15. Sebastian Prediger, 2011. "How does income inequality affect cooperation and punishment in public good settings?," MAGKS Papers on Economics 201138, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  16. Felix Koelle, 2012. "Heterogeneity and Cooperation in Privileged Groups: The Role of Capability and Valuation on Public Goods Provision," Cologne Graduate School Working Paper Series 03-08, Cologne Graduate School in Management, Economics and Social Sciences.
  17. Weng, Qian & Carlsson, Fredrik, 2013. "Cooperation in teams: the role of identity, punishment and endowment distribution," Working Papers in Economics 551, University of Gothenburg, Department of Economics.

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