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Does the Gini index represent people's views on inequality?

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  • Gaëlle Aymeric

    (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier)

  • Brice Magdalou

    (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique, CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier)

Abstract

This paper presents findings from a web-experiment on a representative sample of the French population. It examines the acceptability of the Pigou-Dalton principle of transfers, which posits that transferring income from an individual to a relatively poorer one, reduces overall inequality. While up to 60% of respondents reject standard transfers, the three alternative transfers we test receive more approval, especially those promoting solidarity among lower-income recipients. The study then models respondents' preferences with two types of social welfare functions, utilitarian and Extended Gini. The Extended Gini model aligns better with individual preferences. Nevertheless, Extended Gini-type social welfare functions that adhere to the principle of transfers (including the one underlying the Gini index) poorly capture preferences of each individual. However, quite surprisingly, the preferences of the median individual align almost perfectly with the Gini-based function, using either parametric or non-parametric estimates.

Suggested Citation

  • Gaëlle Aymeric & Brice Magdalou, 2024. "Does the Gini index represent people's views on inequality?," Working Papers hal-04783034, HAL.
    • Handle: RePEc:hal:wpaper:hal-04783034
    Note: View the original document on HAL open archive server: https://hal.science/hal-04783034v1
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