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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)

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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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Publisher 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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Related research
Keywords: Inequality; Heterogeneity; Cooperation; Public goods; Experiments;

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Find related papers by JEL classification:
C9 - Mathematical and Quantitative Methods - - Design of Experiments
H4 - Public Economics - - Publicly Provided Goods

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  1. Lucca Corazzini & Marco Faravelli & Lucca Stanca, 2007. "A Prize to Give for: An Experiment on Public Good Funding Mechanisms," ESE Discussion Papers 159, Edinburgh School of Economics, University of Edinburgh. [Downloadable!]
    Other versions:
  2. 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, Göteborg University, Department of Economics. [Downloadable!]
  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. [Downloadable!]
    Other versions:
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