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Inequality, Group Cohesion, and Public Good Provision: An Experimental Analysis

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Abstract

Recent studies argue that inequality reduces group cohesiveness and dampens support for expenditures on public goods and social programs. In light of competing theoretical explanations and mixed empirical evidence of the effect of inequality on public goods provision, we conduct a test using a public goods experiment. 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 individuals 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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File URL: http://economics.missouri.edu/working-papers/2004/wp0418_Milyo.pdf
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Bibliographic Info

Paper provided by Department of Economics, University of Missouri in its series Working Papers with number 0418.

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Length: 45 pgs.
Date of creation: 27 Dec 2004
Date of revision: 27 Dec 2004
Handle: RePEc:umc:wpaper:0418

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Keywords: Public Good; Inequality; Free Rider;

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Cited by:
  1. Lisa R. Anderson & Jennifer M. Mellor & Jeffrey Milyo, 2004. "Social Capital and Contributions in a Public-Goods Experiment," American Economic Review, American Economic Association, vol. 94(2), pages 373-376, May.
  2. Lisa Anderson & Jennifer Mellor & Jeffrey Milyo, 2004. "Do Liberals Play Nice? The Effects of Party and Political Ideology in Public Goods and Trust Games," Working Papers 0411, Harris School of Public Policy Studies, University of Chicago.
  3. Andre Hofmeyr & Justine Burns & Martine Visser, 2008. "Income Inequality, Reciprocity and Public Good Provision: An Experimental Analysis," SALDRU Working Papers 23, Southern Africa Labour and Development Research Unit, University of Cape Town.
  4. Jennifer M. Mellor & Jeffrey Milyo, 2004. "State Social Capital and Individual Health Status," Working Papers 05, Department of Economics, College of William and Mary.
  5. Marianna Baggio & Luigi Mittone, 2014. "An experimental approach to generational heterogeneity," CEEL Working Papers 1404, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.

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