An empirical investigation of the trade-off between effectiveness and equity in resource allocation problems

The trade-off between effectiveness and equity in resource allocation is a key concern in the public and humanitarian sectors. Using an innovative experimental framework, we examine how decision-makers evaluate various allocation approaches from a centralized perspective, rather than the individual-focused analyses commonly found in the literature. As such, our methodology provides novel insights into balancing these often conflicting objectives. The results reveal that integrating both effectiveness and equity yields solutions that better align with respondents' preferences than approaches that focus solely on either aspect. Moreover, contrary to our initial conjecture, measures with a stronger emphasis on equity were favored, provided effectiveness was not substantially compromised. This suggests that decision-makers might be more concerned about equity than previously thought. Gini-based measures proved the most accurate at capturing these preferences. At the same time, the max-min approach was less aligned with their preferences, suggesting a potential disconnect between theoretical models in the literature and actual decision-making practices. Additionally, significant variability in individual responses highlighted differing views on the effectiveness-equity trade-off, suggesting the need for adaptable allocation models to accommodate different preference profiles. These findings provide valuable insights for researchers and practitioners seeking quantitative models to navigate the complex trade-offs involved in resource allocation.