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An Unconsidered Leave? Inequality Aversion and the Brexit Referendum

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  • Costa-Font, Joan

    (London School of Economics)

  • Cowell, Frank A.

    (London School of Economics)

Abstract

This paper examines a behavioural explanation for the Brexit referendum result, the role of an individual's inequality aversion (IA). We study whether the referendum result was an "unconsidered Leave" partially driven by people's low aversion to inequality. We use a representative sample of the UK population fielded in 2017, and analyse the extent to which lottery-based individual IA estimates predict their Brexit vote. We consider alternative potential drivers of IA in both income and health domains; these include risk aversion, locus of control, alongside socio-economic and demographic characteristics. A greater aversion to income inequality predicts a lower probability of voting for Leave, even when controlling for risk aversion and other drivers of the Brexit vote. This effect is only true among men, for whom an increase in income IA by one standard deviation decreases their likelihood of voting for leaving the EU by 5% on average. Had there been a greater IA, the overall referendum result might have been different. However, the effect of health inequality aversion is not significantly different from zero.

Suggested Citation

  • Costa-Font, Joan & Cowell, Frank A., 2024. "An Unconsidered Leave? Inequality Aversion and the Brexit Referendum," IZA Discussion Papers 17439, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp17439
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    References listed on IDEAS

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    1. 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.
    2. Alabrese, Eleonora & Becker, Sascha O. & Fetzer, Thiemo & Novy, Dennis, 2019. "Who voted for Brexit? Individual and regional data combined," European Journal of Political Economy, Elsevier, vol. 56(C), pages 132-150.
    3. Sascha O Becker & Thiemo Fetzer & Dennis Novy, 2017. "Who voted for Brexit? A comprehensive district-level analysis," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 32(92), pages 601-650.
    4. Costa-Font, J.; & Cowell, F.;, 2019. "Incorporating Inequality Aversion in Health-Care Priority Setting," Health, Econometrics and Data Group (HEDG) Working Papers 19/04, HEDG, c/o Department of Economics, University of York.
    5. Booth, Alison & Cardona-Sosa, Lina & Nolen, Patrick, 2014. "Gender differences in risk aversion: Do single-sex environments affect their development?," Journal of Economic Behavior & Organization, Elsevier, vol. 99(C), pages 126-154.
    6. Ľuboš Pástor & Pietro Veronesi, 2021. "Inequality Aversion, Populism, and the Backlash against Globalization," Journal of Finance, American Finance Association, vol. 76(6), pages 2857-2906, December.
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    9. Joan Costa-Font & Frank Cowell & Joan Costa-i-Font, 2024. "Specific Egalitarianism? Inequality Aversion across Domains," CESifo Working Paper Series 11261, CESifo.
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    More about this item

    Keywords

    imaginary grandchild; income inequality aversion; inequality aversion; risk aversion; health inequality aversion; Brexit; locus of control;
    All these keywords.

    JEL classification:

    • H1 - Public Economics - - Structure and Scope of Government
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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