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Aversion to inequality in Italy and its determinants

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Author Info

  • Vincenzo Atella

    ()

  • J. Coggins
  • Federico Perali

    ()

Abstract

The main goal of this paper is to estimate the preferences of the Italian society towards equity in order to verify whether preferences i) have changed across the years, and ii) can be related to specific sociodemographic characteristics. Introducing equity concerns in the implementation of economic policies is a fundamental problem faced by both economists and policy makers. This paper uses a social welfare function a la Jorgenson and Slesnick to estimate society’s aversion towards inequality by implementing a voting scheme for compiling individuals’ equity preferences into a social choice by majority rule. The results show that preferences are highly polarized toward a low and a high concern for equity aversion and that this concern is significantly related with several sociodemographic characteristics. Among them, income plays an important role with richer people that tend to favor less equity. Results also show that preferences towards equity have changed across the years.

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Bibliographic Info

Paper provided by CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY in its series CHILD Working Papers with number wp03_03.

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Length: 32 pages
Date of creation: Nov 2002
Date of revision:
Handle: RePEc:wpc:wplist:wp03_03

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Keywords: inequity; equity; welfare; social function;

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References

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  1. Lewbel, Arthur, 1985. "A Unified Approach to Incorporating Demographic or Other Effects into Demand Systems," Review of Economic Studies, Wiley Blackwell, vol. 52(1), pages 1-18, January.
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  3. Blackorby, Charles & Bossert, Walter, 2004. "Interpersonal Comparisons Of Well-Being," The Warwick Economics Research Paper Series (TWERPS) 711, University of Warwick, Department of Economics.
  4. Amiel, Yoram & Creedy, John & Hurn, Stan, 1999. " Measuring Attitudes towards Inequality," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(1), pages 83-96, March.
  5. Roland Benabou & Efe A. Ok, 1998. "Social Mobility and the Demand for Redistribution: The POUM Hypothesis," NBER Working Papers 6795, National Bureau of Economic Research, Inc.
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  7. Jorgenson, Dale W, 1990. "Aggregate Consumer Behavior and the Measurement of Social Welfare," Econometrica, Econometric Society, vol. 58(5), pages 1007-40, September.
  8. Amartya Sen, 1999. "The Possibility of Social Choice," American Economic Review, American Economic Association, vol. 89(3), pages 349-378, June.
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  10. Sen, Amartya K, 1979. "Personal Utilities and Public Judgements: Or What's Wrong with Welfare Economics?," Economic Journal, Royal Economic Society, vol. 89(355), pages 537-58, September.
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  12. Alberto Alesina & Rafael Di Tella & Robert MacCulloch, 2001. "Inequality and Happiness: Are Europeans and Americans Different?," Harvard Institute of Economic Research Working Papers 1938, Harvard - Institute of Economic Research.
  13. Hirschman, Albert O., 1973. "The changing tolerance for income inequality in the course of economic development," World Development, Elsevier, vol. 1(12), pages 29-36, December.
  14. Alberto Alesina & Eliana La Ferrara, 2001. "Preferences for Redistribution in the Land of Opportunities," NBER Working Papers 8267, National Bureau of Economic Research, Inc.
  15. d'Aspremont, Claude & Gevers, Louis, 1977. "Equity and the Informational Basis of Collective Choice," Review of Economic Studies, Wiley Blackwell, vol. 44(2), pages 199-209, June.
  16. Vincenzo Atella & Martina Menon & Federico Perali, 2003. "Estimation of Unit Values in Cross Sections without Quantity Information and Implications for Demand and Welfare Analysis," CEIS Research Paper 12, Tor Vergata University, CEIS.
  17. Buccola, Steven T & Sukume, Chrispen, 1993. "Social Welfare of Alternative Controlled-Price Policies," The Review of Economics and Statistics, MIT Press, vol. 75(1), pages 86-96, February.
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  22. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June.
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  26. Jay S. Coggins & Federico Perali, 2000. "Voting For Equity: Estimating Society'S Preferences Toward Inequality," CHILD Working Papers wp04_00, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
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Cited by:
  1. BARGAIN Olivier & DOLLS Mathias & NEUMANN Dirk & PEICHL Andreas & SIEGLOCH Sebastian, 2011. "Tax-Benefit Systems in Europe and the US: Between Equity and Efficiency," CEPS/INSTEAD Working Paper Series 2011-11, CEPS/INSTEAD.

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