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Aversion to inequality in Italy and its determinants

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Author Info
Vincenzo Atella ()
J. Coggins
Federico Perali ()

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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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Publisher 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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Related research
Keywords: inequity; equity; welfare; social function;

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Find related papers by JEL classification:
C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - General
D10 - Microeconomics - - Household Behavior - - - General
J10 - Labor and Demographic Economics - - Demographic Economics - - - General

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  1. Amiel, Yoram & Creedy, John & Hurn, Stan, 1999. " Measuring Attitudes towards Inequality," Scandinavian Journal of Economics, Blackwell Publishing, vol. 101(1), pages 83-96, March. [Downloadable!] (restricted)
  2. Atkinson,A.B. & Rainwater,L. & Smeeding,T., 1995. "Income Distribution in European Countries," Cambridge Working Papers in Economics 9535, Faculty of Economics, University of Cambridge.
  3. Pollak, Robert A & Wales, Terence J, 1981. "Demographic Variables in Demand Analysis," Econometrica, Econometric Society, vol. 49(6), pages 1533-51, November. [Downloadable!] (restricted)
  4. 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. [Downloadable!] (restricted)
  5. Lewbel, Arthur, 1989. "Household equivalence scales and welfare comparisons," Journal of Public Economics, Elsevier, vol. 39(3), pages 377-391, August. [Downloadable!] (restricted)
  6. 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. [Downloadable!]
    Other versions:
  7. 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. [Downloadable!]
  8. Roland Bénabou & Efe A. Ok, 2001. "Social Mobility And The Demand For Redistribution: The Poum Hypothesis," The Quarterly Journal of Economics, MIT Press, vol. 116(2), pages 447-487, May. [Downloadable!] (restricted)
    Other versions:
  9. Alberto Alesina & Eliana La Ferrara, 2001. "Preferences for Redistribution in the Land of Opportunities," Harvard Institute of Economic Research Working Papers 1936, Harvard - Institute of Economic Research. [Downloadable!]
    Other versions:
  10. Roberts, Kevin W S, 1980. "Possibility Theorems with Interpersonally Comparable Welfare Levels," Review of Economic Studies, Blackwell Publishing, vol. 47(2), pages 409-20, January. [Downloadable!] (restricted)
  11. Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-27, October. [Downloadable!] (restricted)
  12. Lewbel, Arthur, 1985. "A Unified Approach to Incorporating Demographic or Other Effects into Demand Systems," Review of Economic Studies, Blackwell Publishing, vol. 52(1), pages 1-18, January. [Downloadable!] (restricted)
  13. Blackorby, Charles & Boyce, Richard & Russell, R Robert, 1978. "Estimation of Demand Systems Generated by the Gorman Polar Form: A Generalization of the S-Branch Utility Tree," Econometrica, Econometric Society, vol. 46(2), pages 345-63, March. [Downloadable!] (restricted)
  14. 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. [Downloadable!]
  15. Daniel T. Slesnick, 1998. "Empirical Approaches to the Measurement of Welfare," Journal of Economic Literature, American Economic Association, vol. 36(4), pages 2108-2165, December. [Downloadable!] (restricted)
  16. Jorgenson, Dale W & Slesnick, Daniel T, 1987. "Aggregate Consumer Behavior and Household Equivalence Scales," Journal of Business & Economic Statistics, American Statistical Association, vol. 5(2), pages 219-32, April.
  17. 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. [Downloadable!] (restricted)
  18. BLACKORBY, Charles & BOSSERT, Walter, 2004. "Interpersonal Comparisons of Well-Being," Cahiers de recherche 2004-06, Universite de Montreal, Departement de sciences economiques. [Downloadable!]
    Other versions:
  19. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June. [Downloadable!] (restricted)
  20. 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. [Downloadable!] (restricted)
  21. Jorgenson, Dale W. & Slesnick, Daniel T., 1990. "Inequality and the standard of living," Journal of Econometrics, Elsevier, vol. 43(1-2), pages 103-120. [Downloadable!] (restricted)
  22. Blackorby, Charles & Donaldson, David, 1988. "Money metric utility: A harmless normalization?," Journal of Economic Theory, Elsevier, vol. 46(1), pages 120-129, October. [Downloadable!] (restricted)
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  24. Jorgenson, Dale W, 1990. "Aggregate Consumer Behavior and the Measurement of Social Welfare," Econometrica, Econometric Society, vol. 58(5), pages 1007-40, September. [Downloadable!] (restricted)
  25. Blackorby, C. & Donaldson, D., 1989. "Adult-Equivalence Scales, Interpersonal Comparison Of Well-Being, And Applied Welfare Economics," UBC Departmental Archives 89-24, UBC Department of Economics.
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  27. d'Aspremont, Claude & Gevers, Louis, 1977. "Equity and the Informational Basis of Collective Choice," Review of Economic Studies, Blackwell Publishing, vol. 44(2), pages 199-209, June. [Downloadable!] (restricted)
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