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Measuring International Inequity Aversion

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  • Tol, Richard S. J.

    (Economic and Social Research Institute (ESRI))

Abstract

I measure the rate of aversion to inequality in consumption as expressed in the development aid given by rich countries to poor ones between 1965 and 2005. Over time, OECD countries have become less concerned about international inequity. Even for a fairly leaky bucket, the consumption rate of inequity aversion is less than the rate of risk aversion, which implies that the pure rate of inequity aversion is negative. That is, rich countries would prefer to see greater inequality between rich and poor countries.

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File URL: http://www.esri.ie/UserFiles/publications/20080919092928/WP254.pdf
File Function: First version, 2008
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Bibliographic Info

Paper provided by Economic and Social Research Institute (ESRI) in its series Papers with number WP254.

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Length: 16 pages
Date of creation: Sep 2008
Date of revision:
Handle: RePEc:esr:wpaper:wp254

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Keywords: Inequity aversion; risk aversion; income distribution; development aid;

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  1. Carlsson, Fredrik & Daruvala, Dinky & Johansson-Stenman, Olof, 2001. "Are People Inequality Averse Or Just Risk Averse?," Working Papers in Economics 43, University of Gothenburg, Department of Economics.
  2. David J. Evans, 2005. "The elasticity of marginal utility of consumption: estimates for 20 OECD countries," Fiscal Studies, Institute for Fiscal Studies, vol. 26(2), pages 197-224, June.
  3. Johansson-Stenman, Olof, 2005. "Global environmental problems, efficiency and limited altruism," Economics Letters, Elsevier, vol. 86(1), pages 101-106, January.
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