Advanced Search
MyIDEAS: Login to save this paper or follow this series

Inequality Aversion and Risk Attitudes

Contents:

Author Info

  • Ada Ferrer-i-Carbonell
  • Xavier Ramos

Abstract

Using self reported measures of life satisfaction and risk attitudes, we empirically test whether there is a relationship between individuals inequality and risk aversion. The empirical analysis uses the German SOEP household panel for the years 1997 to 2007 to conclude that the negative effect of inequality measured by the sample gini coefficient by year and federal state is larger for those individuals who report to be less willing to take risks. Nevertheless, the empirical results suggest that even though inequality and risk aversion are related, they are not the same thing. The paper shows that the relationship between risk attitudes and inequality aversion survives the inclusion of individual characteristics (i.e. income, education, and gender) that may be correlated with both risk attitudes and inequality aversion.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.347295.de/diw_sp0271.pdf
Download Restriction: no

Bibliographic Info

Paper provided by DIW Berlin, The German Socio-Economic Panel (SOEP) in its series SOEPpapers on Multidisciplinary Panel Data Research with number 271.

as in new window
Length: 27 p.
Date of creation: 2010
Date of revision:
Handle: RePEc:diw:diwsop:diw_sp271

Contact details of provider:
Postal: Mohrenstraße 58, D-10117 Berlin
Phone: xx49-30-89789-671
Fax: xx49-30-89789-109
Email:
Web page: http://www.diw.de/en/soep
More information through EDIRC

Related research

Keywords: Happiness; inequality aversion; risk attitudes; well-being;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Alberto Alesina & Rafael Di Tella & Robert MacCulloch, 2001. "Inequality and Happiness: Are Europeans and Americans Different?," Harvard Institute of Economic Research Working Papers, Harvard - Institute of Economic Research 1938, Harvard - Institute of Economic Research.
  2. Alberto Alesina & Eliana La Ferrara, 2001. "Preferences for Redistribution in the Land of Opportunities," Harvard Institute of Economic Research Working Papers, Harvard - Institute of Economic Research 1936, Harvard - Institute of Economic Research.
  3. Dohmen, Thomas & Falk, Armin & Huffman, David B. & Sunde, Uwe & Schupp, Jürgen & Wagner, Gert G., 2005. "Individual Risk Attitudes: New Evidence from a Large, Representative, Experimentally-Validated Survey," IZA Discussion Papers 1730, Institute for the Study of Labor (IZA).
  4. Brennan, Geoffrey & González, Luis G. & Güth, Werner & Levati, M. Vittoria, 2008. "Attitudes toward private and collective risk in individual and strategic choice situations," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 67(1), pages 253-262, July.
  5. Alberto Alesina & George-Marios Angeletos, 2004. "Fairness and Redistribution," Levine's Bibliography 122247000000000283, UCLA Department of Economics.
  6. Carlsson, Fredrik & Daruvala, Dinky & Johansson-Stenman, Olof, 2001. "Are People Inequality Averse Or Just Risk Averse?," Working Papers in Economics, University of Gothenburg, Department of Economics 43, University of Gothenburg, Department of Economics.
  7. Roland Bénabou & Efe A. Ok, 2001. "Social Mobility And The Demand For Redistribution: The Poum Hypothesis," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 116(2), pages 447-487, May.
  8. La Ferrara, Eliana & Alesina, Alberto, 2005. "Preferences for Redistribution in the Land of Opportunities," Scholarly Articles 4552533, Harvard University Department of Economics.
  9. Ada Ferrer-i-Carbonell & Paul Frijters, 2002. "How important is Methodology for the Estimates of the Determinants of Happiness?," Tinbergen Institute Discussion Papers, Tinbergen Institute 02-024/3, Tinbergen Institute.
  10. Clark, Andrew E. & Frijters, Paul & Shields, Michael A., 2007. "Relative Income, Happiness and Utility: An Explanation for the Easterlin Paradox and Other Puzzles," IZA Discussion Papers 2840, Institute for the Study of Labor (IZA).
  11. Cowell, Frank A. & Schokkaert, Erik, 2001. "Risk perceptions and distributional judgments," European Economic Review, Elsevier, Elsevier, vol. 45(4-6), pages 941-952, May.
  12. Alesina, Alberto & Giuliano, Paola, 2009. "Preferences for Redistribution," IZA Discussion Papers 4056, Institute for the Study of Labor (IZA).
  13. Ravallion, Martin & Lokshin, Michael, 2000. "Who wants to redistribute?: The tunnel effect in 1990s Russia," Journal of Public Economics, Elsevier, Elsevier, vol. 76(1), pages 87-104, April.
  14. Irena Grosfeld & Claudia Senik, 2010. "The emerging aversion to inequality," The Economics of Transition, The European Bank for Reconstruction and Development, The European Bank for Reconstruction and Development, vol. 18(1), pages 1-26, 01.
  15. Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007. "The German Socio-Economic Panel Study (SOEP): Scope, Evolution and Enhancements," SOEPpapers on Multidisciplinary Panel Data Research 1, DIW Berlin, The German Socio-Economic Panel (SOEP).
  16. Yoram Kroll & Liema Davidovitz, 2003. "Inequality Aversion versus Risk Aversion," Economica, London School of Economics and Political Science, London School of Economics and Political Science, vol. 70(277), pages 19-29, February.
  17. Terza, Joseph V., 1987. "Estimating linear models with ordinal qualitative regressors," Journal of Econometrics, Elsevier, Elsevier, vol. 34(3), pages 275-291, March.
  18. Schwarze, Johannes & Harpfer, Marco, 2007. "Are people inequality averse, and do they prefer redistribution by the state?: Evidence from German longitudinal data on life satisfaction," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, Elsevier, vol. 36(2), pages 233-249, April.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Ada Ferrer-i-Carbonell, 2013. "Happiness economics," SERIEs, Spanish Economic Association, Spanish Economic Association, vol. 4(1), pages 35-60, March.
  2. repec:aia:ginidp:dp38 is not listed on IDEAS
  3. Vitezslav Babicky & Andreas Ortmann & Silvester Van Koten, 2010. "Fairness in Risky Environments: Theory and Evidence," CERGE-EI Working Papers wp419, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
  4. Abigail Mcknight & Brian Nolan, 2012. "GINI Intermediate Report WP 4: Social Impacts of Inequalities," GINI Discussion Papers, AIAS, Amsterdam Institute for Advanced Labour Studies wp4, AIAS, Amsterdam Institute for Advanced Labour Studies.
  5. Schaeffer, Y. & Charlot, S., 2012. "Inequality aversion, income redistribution and economic geography," Working Papers, Grenoble Applied Economics Laboratory (GAEL) 201204, Grenoble Applied Economics Laboratory (GAEL).
  6. Andrew E. Clark & Conchita D'Ambrosio, 2014. "Attitudes to Income Inequality: Experimental and Survey Evidence," PSE Working Papers, HAL halshs-00967938, HAL.
  7. Ada Ferrer-i-carbonell & Ramos, X. (Xavier), 2012. "GINI DP 38: Inequality and Happiness: A Survey," GINI Discussion Papers, AIAS, Amsterdam Institute for Advanced Labour Studies 38, AIAS, Amsterdam Institute for Advanced Labour Studies.
  8. Hübler, Olaf, 2012. "Are Tall People Less Risk Averse than Others?," IZA Discussion Papers 6441, Institute for the Study of Labor (IZA).
  9. Tamas Hajdu & Gabor Hajdu, 2013. "Are more equal societies happier? Subjective well-being, income inequality, and redistribution," IEHAS Discussion Papers, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences 1320, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
  10. Celse, Jérémy, 2012. "Is the positional bias an artefact? Distinguishing positional concerns from egalitarian concerns," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, Elsevier, vol. 41(3), pages 277-283.

Lists

This item is featured on the following reading lists or Wikipedia pages:
  1. SOEP based publications

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:diw:diwsop:diw_sp271. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bibliothek).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.