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Equality-Efficiency Trade-off within French and German Couples – A Comparative Experimental Study

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  • Beblo, Miriam

    (Universität Hamburg)

  • Beninger, Denis

    (Universität Hamburg and University of Strasbourg)

  • Cochard, François

    (CRESE)

  • Couprie, Hélène

    (THEMA)

  • Hopfensitz, Astrid

    (TSE)

Abstract

We present the results of an experiment measuring social preferences within couples in a context where intra-household pay-off inequality can be reduced at the cost of diminishing household income. We measure social norms regarding this efficiency-equality trade-off and implement a cross-country comparison between France and Germany. In particular, we show that German households are more inequality averse and are thus less efficient than French households. A decomposition of this difference reveals that approximately 40% is driven by diverging sample compositions in the two countries, while 60% of the initial French/German difference remains unexplained. Beliefs differ significantly from observed behavior in both countries. Efficient choices are overestimated in the German sample and underestimated in the French.

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Bibliographic Info

Paper provided by Toulouse School of Economics (TSE) in its series TSE Working Papers with number 12-374.

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Date of creation: Nov 2012
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Handle: RePEc:tse:wpaper:26759

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Keywords: Intra-household allocation; Inequality aversion; Pareto efficiency; social norms;

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  1. Ronald Oaxaca, . "Male-Female Wage Differentials in Urban Labor Markets," Working Papers 396, Princeton University, Department of Economics, Industrial Relations Section..
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  7. Cochard François, Couprie Helene, Hopfensitz Astrid, 2009. "Do Spouses Cooperate? And If Not: Why?," THEMA Working Papers 2009-10, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
  8. Hessel Oosterbeek & Randolph Sloof & Gijs van de Kuilen, 2004. "Cultural differences in ultimatum game experiments: Evidence from a meta-analysis," Experimental 0401003, EconWPA.
  9. Gustavo J. Bobonis, 2009. "Is the Allocation of Resources within the Household Efficient? New Evidence from a Randomized Experiment," Journal of Political Economy, University of Chicago Press, vol. 117(3), pages 453-503, 06.
  10. Willinger, Marc & Keser, Claudia & Lohmann, Christopher & Usunier, Jean-Claude, 2003. "A comparison of trust and reciprocity between France and Germany: Experimental investigation based on the investment game," Journal of Economic Psychology, Elsevier, vol. 24(4), pages 447-466, August.
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