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Choices in egalitarian distribution: inequality aversion versus risk aversion

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  • Kroll, Yoram
  • Davidovitz, Leima

Abstract

Inequality aversion and risk aversion are widely assumed features of economic models. But a review of the literature revealed that inequlity aversion and risk aversion are treated as separate variables. This paper presents exploratory research designed to separate inequality aversion from risk aversion. In a set of laboratory experiments, subjects chose between two alternatives with the same individuals risk, but different levels of egalitarianism. Thus, the choice of the more egalitarian alternative with constant risk level implies a higher level of inequality aversion. The experiment was conducted among 211 eight-year-old children, 107 of whom live on Kibbutz and 104 in the city. We found not significant difference between Kibbutz children and city children in inequality aversion.

Suggested Citation

  • Kroll, Yoram & Davidovitz, Leima, 1999. "Choices in egalitarian distribution: inequality aversion versus risk aversion," LSE Research Online Documents on Economics 6582, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:6582
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    References listed on IDEAS

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    Cited by:

    1. Yoram Amiel & Frank Cowell & Liema Davidovitz & Avraham Polovin, 2008. "Preference reversals and the analysis of income distributions," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 30(2), pages 305-330, February.
    2. 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.
    3. Pablo Brañas-Garza & Ramón Cobo-Reyes & Almudena Domínguez, 2006. ""Si el lo necesita": Gypsy fairness in Vallecas," Experimental Economics, Springer;Economic Science Association, vol. 9(3), pages 253-264, September.
    4. Cowell, Frank A. & Schokkaert, Erik, 2001. "Risk perceptions and distributional judgments," European Economic Review, Elsevier, vol. 45(4-6), pages 941-952, May.

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    More about this item

    Keywords

    Inequality; income distribution; risk; experiments;
    All these keywords.

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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