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Preferences for Equality in Environmental Outcomes

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  • Maureen Cropper
  • Alan Krupnick
  • William Raich

Abstract

Benefit-cost analyses of health regulations traditionally evaluate their economic efficiency—ignoring equity. To help address the importance of equity, we develop a survey to elicit respondents’ preferences towards equality in health risks stemming from environmental causes. Survey responses are used to parameterize an Atkinson index over environmental health risks. We compare these results to similar questions in the income context and find that respondents are significantly more averse to inequality in health risks than in income. The mean respondent is willing to accept a 22% increase in average health risk if risks are equally distributed in the population, but willing to accept a decrease of only 5% in average income if incomes are equally distributed in the population. We find that 30% of respondents answer health risk questions lexicographically—always preferring an equal distribution of risks to an unequal distribution, even if the latter makes everyone better off.

Suggested Citation

  • Maureen Cropper & Alan Krupnick & William Raich, 2016. "Preferences for Equality in Environmental Outcomes," NBER Working Papers 22644, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:22644
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    References listed on IDEAS

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    1. Glenn Sheriff & Kelly B. Maguire, 2013. "Ranking Distributions of Environmental Outcomes Across Population Groups," NCEE Working Paper Series 201304, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Aug 2013.
    2. Jukka Pirttilä & Roope Uusitalo, 2007. "Leaky Bucket in the Real World: Estimating Inequality Aversion Using Survey Data," CESifo Working Paper Series 2026, CESifo Group Munich.
    3. Blackorby, Charles & Donaldson, David, 1980. "A Theoretical Treatment of Indices of Absolute Inequality," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 21(1), pages 107-136, February.
    4. Jukka Pirttilä & Roope Uusitalo, 2010. "A ‘Leaky Bucket’ in the Real World: Estimating Inequality Aversion using Survey Data," Economica, London School of Economics and Political Science, vol. 77(305), pages 60-76, January.
    5. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    6. Yoram Amiel & John Creedy & Stan Hurn, 1999. "Measuring Attitudes Towards Inequality," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(1), pages 83-96, March.
    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(3), pages 375-396, August.
    8. Olof Johansson-Stenman & Fredrik Carlsson & Dinky Daruvala, 2002. "Measuring Future Grandparents" Preferences for Equality and Relative Standing," Economic Journal, Royal Economic Society, vol. 112(479), pages 362-383, April.
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    Cited by:

    1. Richard Cookson & Shehzad Ali & Aki Tsuchiya & Miqdad Asaria, 2018. "E‐learning and health inequality aversion: A questionnaire experiment," Health Economics, John Wiley & Sons, Ltd., vol. 27(11), pages 1754-1771, November.
    2. Erin T. Mansur & Glenn Sheriff, 2019. "Do Pollution Markets Harm Low Income and Minority Communities? Ranking Emissions Distributions Generated by California's RECLAIM Program," NBER Working Papers 25666, National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • I1 - Health, Education, and Welfare - - Health

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