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A ‘Leaky Bucket’ in the Real World: Estimating Inequality Aversion using Survey Data

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  • JUKKA PIRTTILÄ
  • ROOPE UUSITALO

Abstract

Existing evidence of inequality aversion relies on data from class‐room experiments where subjects face hypothetical questions. This paper estimates the magnitude of inequality aversion using representative survey data, with questions related to the real‐economy situations the respondents face. The results reveal that inequality aversion can be measured in a meaningful way using survey data, but the magnitudes of the estimates depend dramatically on how inequality aversion is measured. No matter how measured, the revealed inequality aversion predicts opinions on a wide range of questions related to the welfare state, such as the level of taxation, tax progressivity and the structure of unemployment benefits.

Suggested Citation

  • Jukka Pirttilä & Roope Uusitalo, 2010. "A ‘Leaky Bucket’ in the Real World: Estimating Inequality Aversion using Survey Data," Economica, London School of Economics and Political Science, vol. 77(305), pages 60-76, January.
    • Handle: RePEc:bla:econom:v:77:y:2010:i:305:p:60-76
    DOI: 10.1111/j.1468-0335.2008.00729.x
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    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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