Efficiency-Equality Trade-off within French and German Couples A Comparative Experimental Study
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 by reported beliefs on the behavior of peers, and we implement a cross-country comparison between France and Germany. In particular, we show that German households are more income inequality averse and thus less income-maximizing than French households. Decomposition reveals that diverging sample compositions in the two countries drive less than half of the difference, while over half of the initial French/German difference remains unexplained. Beliefs differ significantly from observed behavior in both countries. Income-maximizing choices are overestimated in the German sample and underestimated in the French.
Volume (Year): (2015)
Issue (Month): 117-118 ()
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