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Income Redistribution And Public Good Provision: An Experiment

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  • JONATHAN MAURICE
  • AGATHE ROUAIX
  • MARC WILLINGER

Abstract

We investigate experimentally the relevance of Warr's neutrality theorem (1983). In our test treatments we implement an unexpected income redistribution among group members. We compare treatments with equalizing (unequalizing) redistribution to benchmark treatments without redistribution, starting either with an equal or unequal income distribution. Our data are consistent with the neutrality theorem: redistribution (either equalizing or unequalizing) does not affect the amount of voluntarily provided public good. However at the individual level we observe that subjects tend to under-adjust with respect to the predicted Nash-adjustment. We also observe an insignificant adjustment asymmetry between the poor and the rich: after redistribution subjects who become poorer lower their contribution by a larger amount than subjects who become richer increase their contribution. Finally we also observe a general tendency for poor subjects to over-contribute significantly more than rich subjects.
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Suggested Citation

  • Jonathan Maurice & Agathe Rouaix & Marc Willinger, 2013. "Income Redistribution And Public Good Provision: An Experiment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 54, pages 957-975, August.
  • Handle: RePEc:wly:iecrev:v:54:y:2013:i::p:957-975
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Kamei, Kenju, 2014. "Promoting Competition or Helping Less-Endowed? An Experiment on Collective Institutional Choices under Intra-Group Inequality," MPRA Paper 56774, University Library of Munich, Germany.
    2. Sheremeta, Roman & Uler, Neslihan, 2016. "The Impact of Taxes and Wasteful Government Spending on Giving," MPRA Paper 71001, University Library of Munich, Germany.
    3. Philipp E. Otto & Friedel Bolle, 2016. "Organizational power: Should remuneration heterogeneity mirror hierarchy?," Review of Economic Design, Springer;Society for Economic Design, vol. 20(3), pages 187-205, September.
    4. Tatsuyoshi Saijo, 2015. "The sandwich property in the voluntary contribution mechanism:The instability approach," Working Papers SDES-2015-13, Kochi University of Technology, School of Economics and Management, revised Mar 2015.
    5. Agathe Rouaix & Charles Figuières & Marc Willinger, 2015. "The trade-off between welfare and equality in a public good experiment," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 45(3), pages 601-623, October.
    6. Tatsuyoshi Saijo, 2014. "The instability of the voluntary contribution mechanism," Working Papers SDES-2014-3, Kochi University of Technology, School of Economics and Management, revised Oct 2014.
    7. Feng, Jun & Saijo, Tatsuyoshi & Shen, Junyi & Qin, Xiangdong, 2018. "Instability in the voluntary contribution mechanism with a quasi-linear payoff function: An experimental analysis," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 72(C), pages 67-77.
    8. Masaki Aoyagi & Naoko Nishimura & Yoshitaka Okano, 2017. "Efficiency and Voluntary Redistribution under Inequality," ISER Discussion Paper 0992, Institute of Social and Economic Research, Osaka University.
    9. Keser, Claudia & Markstädter, Andreas & Schmidt, Martin & Schnitzler, Cornelius, 2014. "Social costs of inequality: Heterogeneous endowments in public-good experiments," Center for European, Governance and Economic Development Research Discussion Papers 217, University of Goettingen, Department of Economics.
    10. Rustam Romaniuc & Dimitri Dubois & Gregory J. DeAngelo & Bryan C. McCannon, 2016. "Intergroup Solidarity and Local Public Goods Provision : An Experiment," Working Papers 16-11, LAMETA, Universitiy of Montpellier.

    More about this item

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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