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Voting For Equity: Estimating Society'S Preferences Toward Inequality

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  • Jay S. Coggins
  • Federico Perali

Abstract

Incorporating equity considerations in comparisons of economic policies is always challenging. This paper uses a social welfare function, a la Jorgenson and Slesnick, incorporating both e±ciency and equity to estimate society's preferences toward inequality. The function is based upon a demographically modified demand system that delivers an interpersonally comparable measure of individual welfare that aggregates exactly in a social welfare function. Our innovation is the development of a voting scheme for compiling individuals' equity preferences into a social decision. It is found that while preferences across households are heterogeneous, the Colombian preferences toward inequality are polarized around a low and a high degree of aversion to inequality. By majority rule, the Colombian society prefers the maximum possible equity. However, the most prosperous and educated deciles and the households living in Bogotà vote for higher inequality.

Suggested Citation

  • 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.
    • Handle: RePEc:wpc:wplist:wp04_00
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    References listed on IDEAS

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    Cited by:

    1. Vincenzo Atella & Jay Coggins & Federico Perali, 2005. "Aversion to inequality in Italy and its determinants," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 2(2), pages 117-144, January.
    2. Olivier Bargain & Amedeo Spadaro, 2008. "Optimal Taxation, Social Contract and the Four Worlds of Welfare Capitalism," Working Papers 200816, School of Economics, University College Dublin.
    3. Olivier Bargain & Claire Keane, 2010. "Tax–Benefit‐revealed Redistributive Preferences Over Time: Ireland 1987–2005," LABOUR, CEIS, vol. 24(s1), pages 141-167, December.
    4. Amedeo Spadaro, 2008. "Optimal taxation, social contract and the four worlds of welfare capitalism," Working Papers 98, ECINEQ, Society for the Study of Economic Inequality.
    5. Amadéo Spadaro, 2008. "Optimal taxation, social contract and the four worlds of welfare capitalism," Working Papers halshs-00586290, HAL.
    6. Rohit Malhorta, 2016. "Demystifying Optimal Welfare Weights Controversy From A Social Strategist Perspective," Journal of Social and Economic Statistics, Bucharest University of Economic Studies, vol. 5(2), pages 33-48, DECEMBER.

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    More about this item

    Keywords

    Aversion to inequality; voting; social welfare functions; interpersonal comparability;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • D10 - Microeconomics - - Household Behavior - - - General
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General

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