The role of socio-economic background in shaping inequality aversion: Evidence based on experimental survey

Why individuals perceive some economic inequalities as legitimate and others not remains a point of debate in economics. This study contributes to answering this question by eliciting individual-level inequality aversion using a lab-administered experimental survey of individuals from different socioeconomic backgrounds. The extreme segmentation of Chile’s educational system offers a unique opportunity to examine perceptions of inequality across diverse social backgrounds. Participants made choices between hypothetical societies defined by their grandchildren’s income and inequality levels. Randomized information treatments introduced competing narratives about the origins of inequality – merit, inherited wealth, and nepotism – enabling precise identification of how the source of inequality shapes aversion. The findings reveal significant heterogeneity: participants clustered into ‘inequality lovers’ and ‘strongly inequality-averse’ groups. The origin of inequality proves crucial: merit-based framing significantly reduces inequality aversion. Surprisingly, nepotism-based framing similarly reduces resistance, suggesting a legitimation of income inequality through family-network advantages. Inherited wealth framing shows no statistically significant effect. Social background strongly influences inequality tolerance. Private university students exhibit lower, more stable aversion and remain unresponsive primarily to information about the origin of inequality. In contrast, public university and technical college students demonstrate greater responsiveness and a stronger aversion to inequality. Relative standing matters: aversion is lowest at the minimum income position and highest at the maximum, consistent with self-interest shaping fairness preferences.