IDEAS home Printed from https://ideas.repec.org/p/ces/ceswps/_2026.html
   My bibliography  Save this paper

Leaky Bucket in the Real World: Estimating Inequality Aversion Using Survey Data

Author

Listed:
  • 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 the magnitude of inequality aversion can be measured in a meaningful way using survey data, but the estimates depend dramatically on the framing of the question. 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, 2007. "Leaky Bucket in the Real World: Estimating Inequality Aversion Using Survey Data," CESifo Working Paper Series 2026, CESifo.
    • Handle: RePEc:ces:ceswps:_2026
    as

    Download full text from publisher

    File URL: https://www.cesifo.org/DocDL/cesifo1_wp2026.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Dirk Engelmann & Martin Strobel, 2004. "Inequality Aversion, Efficiency, and Maximin Preferences in Simple Distribution Experiments," American Economic Review, American Economic Association, vol. 94(4), pages 857-869, September.
    2. Sarah F. Brosnan & Frans B. M. de Waal, 2003. "Monkeys reject unequal pay," Nature, Nature, vol. 425(6955), pages 297-299, September.
    3. Robert B. Barsky & Miles S. Kimball & F. Thomas Juster & Matthew D. Shapiro, 1995. "Preference Parameters and Behavioral Heterogeneity: An Experimental Approach in the Health and Retirement Survey," NBER Working Papers 5213, National Bureau of Economic Research, Inc.
    4. Ernst Fehr & Michael Naef & Klaus M. Schmidt, 2006. "Inequality Aversion, Efficiency, and Maximin Preferences in Simple Distribution Experiments: Comment," American Economic Review, American Economic Association, vol. 96(5), pages 1912-1917, December.
    5. Christiansen, Vidar & Jansen, Eilev S., 1978. "Implicit social preferences in the Norwegian system of indirect taxation," Journal of Public Economics, Elsevier, vol. 10(2), pages 217-245, October.
    6. Corneo, Giacomo & Gruner, Hans Peter, 2002. "Individual preferences for political redistribution," Journal of Public Economics, Elsevier, vol. 83(1), pages 83-107, January.
    7. Fredrik Carlsson & Dinky Daruvala & Olof Johansson‐Stenman, 2005. "Are People Inequality‐Averse, or Just Risk‐Averse?," Economica, London School of Economics and Political Science, vol. 72(287), pages 375-396, August.
    8. Alberto Alesina & George-Marios Angeletos, 2005. "Fairness and Redistribution," American Economic Review, American Economic Association, vol. 95(4), pages 960-980, September.
    9. Ahmad, Ehtisham & Stern, Nicholas, 1984. "The theory of reform and indian indirect taxes," Journal of Public Economics, Elsevier, vol. 25(3), pages 259-298, December.
    10. Alesina, Alberto & Di Tella, Rafael & MacCulloch, Robert, 2004. "Inequality and happiness: are Europeans and Americans different?," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 2009-2042, August.
    11. Tuomala, Matti, 1990. "Optimal Income Tax and Redistribution," OUP Catalogue, Oxford University Press, number 9780198286059.
    12. Robert B. Barsky & F. Thomas Juster & Miles S. Kimball & Matthew D. Shapiro, 1997. "Preference Parameters and Behavioral Heterogeneity: An Experimental Approach in the Health and Retirement Study," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(2), pages 537-579.
    13. Hills, John, 2004. "Inequality and the State," OUP Catalogue, Oxford University Press, number 9780199276646.
    14. Tito Boeri & Axel Börsch-Supan & Guido Tabellini, 2001. "Would you like to shrink the welfare state? A survey of European citizens," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 16(32), pages 08-50.
    15. Emmanuel Saez, 2002. "Optimal Income Transfer Programs: Intensive versus Extensive Labor Supply Responses," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(3), pages 1039-1073.
    16. Schwarze, Johannes & Härpfer, Marco, 2003. "Are People Inequality Averse, and Do They Prefer Redistribution by the State? A Revised Version," IZA Discussion Papers 974, Institute of Labor Economics (IZA).
    17. Yoram Kroll & Liema Davidovitz, 2003. "Inequality Aversion versus Risk Aversion," Economica, London School of Economics and Political Science, vol. 70(277), pages 19-29, February.
    18. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    19. Yoram Amiel & John Creedy & Stan Hurn, 1999. "Measuring Attitudes Towards Inequality," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(1), pages 83-96, March.
    20. Fredrik Carlsson & Dinky Daruvala & Olof Johansson-Stenman, 2005. "Are People Inequality-Averse, or Just Risk-Averse?," Economica, London School of Economics and Political Science, vol. 72(3), pages 375-396, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Clark, Andrew E. & D'Ambrosio, Conchita, 2014. "Attitudes to Income Inequality: Experimental and Survey Evidence," IZA Discussion Papers 8136, Institute of Labor Economics (IZA).
    2. Marcelo Bérgolo & Gabriel Burdín & Santiago Burone & Mauricio de Rosa & Matías Giaccobasso & Martín Leites, 2020. "Dissecting Inequality-Averse Preferences," Documentos de Trabajo (working papers) 20-19, Instituto de Economía - IECON.
    3. Yamamura, Eiji, 2011. "Effect of social capital on income distribution preferences: comparison of neighborhood externality between high- and low-income households," MPRA Paper 32557, University Library of Munich, Germany.
    4. Keigo Kameda & Miho Sato, 2017. "Distributional Preference in Japan," The Japanese Economic Review, Springer, vol. 68(3), pages 394-408, September.
    5. Olivier Bargain & Mathias Dolls & Dirk Neumann & Andreas Peichl & Sebastian Siegloch, 2014. "Comparing inequality aversion across countries when labor supply responses differ," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 21(5), pages 845-873, October.
    6. Hurley, Jeremiah & Mentzakis, Emmanouil & Walli-Attaei, Marjan, 2020. "Inequality aversion in income, health, and income-related health," Journal of Health Economics, Elsevier, vol. 70(C).
    7. Miqdad Asaria & Joan Costa-Font & Frank Cowell, 2023. "How does exposure to COVID-19 influence health and income inequality aversion?," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 61(3), pages 625-647, October.
    8. Stephan Klasen, 2008. "The Efficiency of Equity," Review of Political Economy, Taylor & Francis Journals, vol. 20(2), pages 257-274.
    9. Takashi Oshio & Miki Kobayashi, 2011. "Area-Level Income Inequality and Individual Happiness: Evidence from Japan," Journal of Happiness Studies, Springer, vol. 12(4), pages 633-649, August.
    10. Emmanuel Saez & Stefanie Stantcheva, 2016. "Generalized Social Marginal Welfare Weights for Optimal Tax Theory," American Economic Review, American Economic Association, vol. 106(1), pages 24-45, January.
    11. Aronsson, Thomas & Johansson-Stenman, Olof, 2023. "Optimal Taxation and Other-Regarding Preferences," Umeå Economic Studies 1016, Umeå University, Department of Economics.
    12. Bérgolo, Marcelo & Burdin, Gabriel & Burone, Santiago & De Rosa, Mauricio & Giaccobasso, Matias & Leites, Martin, 2022. "Dissecting inequality-averse preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 782-802.
    13. Cardella, Eric & Roomets, Alex, 2022. "Pay distribution preferences and productivity effects: An experiment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 96(C).
    14. Ada Ferrer-i-Carbonell & Xavier Ramos, 2010. "Inequality Aversion and Risk Attitudes," SOEPpapers on Multidisciplinary Panel Data Research 271, DIW Berlin, The German Socio-Economic Panel (SOEP).
    15. Kuhn, Andreas, 2011. "In the eye of the beholder: Subjective inequality measures and individuals' assessment of market justice," European Journal of Political Economy, Elsevier, vol. 27(4), pages 625-641.
    16. Maite D. Laméris & Richard Jong-A-Pin & Rasmus Wiese, 2018. "An Experimental Test of the Validity of Survey-Measured Political Ideology," CESifo Working Paper Series 7139, CESifo.
    17. Morten Nyborg Støstad & Frank Cowell, 2021. "Inequality as an Externality: Consequences for Tax Design," PSE Working Papers halshs-03495989, HAL.
    18. Santiago Burone & Martin Leites, 2021. "Self-centered and non-self-centered inequality aversion matter: Evidence from Uruguay based on an experimental survey," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 19(2), pages 265-291, June.
    19. Yamamura, Eiji, 2012. "Effects of siblings and birth order on income redistribution preferences," MPRA Paper 38658, University Library of Munich, Germany.
    20. Ingvild Almås & Alexander W. Cappelen & Bertil Tungodden, 2020. "Cutthroat Capitalism versus Cuddly Socialism: Are Americans More Meritocratic and Efficiency-Seeking than Scandinavians?," Journal of Political Economy, University of Chicago Press, vol. 128(5), pages 1753-1788.

    More about this item

    Keywords

    inequality aversion; social welfare functions; welfare state;
    All these keywords.

    JEL classification:

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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_2026. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Klaus Wohlrabe (email available below). General contact details of provider: https://edirc.repec.org/data/cesifde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.