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How did distributional preferences change during the Great Recession?

Listed author(s):
  • Fisman, Raymond
  • Jakiela, Pamela
  • Kariv, Shachar

To better understand how support for redistributive policies is shaped by macroeconomic shocks, we explore how distributional preferences changed during the recent “Great Recession.” We conducted identical modified dictator games during both the recession and the preceding economic boom. The experiments capture subjects' selfishness (the weight on one's own payoff) and equality–efficiency tradeoffs (concerns for reducing differences in payoffs versus increasing total payoffs), which we then compare across economic conditions. Subjects exposed to recession exhibit greater selfishness and higher emphasis on efficiency relative to equality. Reproducing recessionary conditions inside the laboratory by confronting subjects with possible negative payoffs [weakly] intensifies selfishness and increases efficiency orientation, bolstering the interpretation that differing economic circumstances drive our results.

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Article provided by Elsevier in its journal Journal of Public Economics.

Volume (Year): 128 (2015)
Issue (Month): C ()
Pages: 84-95

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Handle: RePEc:eee:pubeco:v:128:y:2015:i:c:p:84-95
DOI: 10.1016/j.jpubeco.2015.06.001
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505578

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