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Aversion to Health Inequality - Pure, Income-Related and Income-Caused

Author

Listed:
  • Matthew Robson

    (Erasmus University Rotterdam)

  • Owen O’Donnell

    (Erasmus University Rotterdam)

  • Tom Van Ourti

    (Erasmus University Rotterdam)

Abstract

We design a novel experiment to identify aversion to pure (univariate) health inequality separately from aversion to income-related and income-caused health inequality. Participants allocate resources to determine health of individuals. Identification comes from random variation in resource productivity and in information on income and its causal effect. We gather data (26,286 observations) from a UK representative sample (n=337) and estimate pooled and participant-specific social preferences while accounting for noise. The median person has strong aversion to pure health inequality, challenging the health maximisation objective of economic evaluation. Aversion to health inequality is even stronger when it is related to income. However, the median person prioritises health of poorer individuals less than is assumed in the standard measure of income-related health inequality. On average, aversion to that inequality does not become stronger when low income is known to cause ill-health. There is substantial heterogeneity in all three types of inequality aversion

Suggested Citation

  • Matthew Robson & Owen O’Donnell & Tom Van Ourti, 2023. "Aversion to Health Inequality - Pure, Income-Related and Income-Caused," Tinbergen Institute Discussion Papers 23-019/V, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20230019
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    References listed on IDEAS

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    1. Raymond Fisman & Shachar Kariv & Daniel Markovits, 2007. "Individual Preferences for Giving," American Economic Review, American Economic Association, vol. 97(5), pages 1858-1876, December.
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    3. Micaela Pinho & Anabela Botelho, 2018. "Inference Procedures to Quantify the Efficiency–Equality Trade-Off in Health from Stated Preferences: A Case Study in Portugal," Applied Health Economics and Health Policy, Springer, vol. 16(4), pages 503-513, August.
    4. Abasolo, Ignacio & Tsuchiya, Aki, 2004. "Exploring social welfare functions and violation of monotonicity: an example from inequalities in health," Journal of Health Economics, Elsevier, vol. 23(2), pages 313-329, March.
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    More about this item

    Keywords

    Inequality Aversion; Social Preferences; Health; Income; Experiment;
    All these keywords.

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D30 - Microeconomics - - Distribution - - - General
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality

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