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A cross-country experimental comparison of preferences for redistribution

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  • Francesco Farina
  • Gianluca Grimalda

Abstract

We examine experimentally individual preferences for redistributions in the US, Italy, and Norway. We decompose demand for redistribution due to luck vis-à-vis individual merit, and study how they are affected by individual and social characteristics. Experimental subjects made four different decisions on how much earning redistribution they wanted to implement in their group starting from a given initial distribution of earnings. The first decision measured preferences for inequality under a condition of impersonality. The second and third decisions were made behind a “veil of ignorance”, whereas the fourth decision was taken knowing one’s position in the earnings scale. Ambiguity and risk aversions were measured in an independent set of decisions. Between-country differences are sizable. Norwegian subjects were generally the most redistributive of the three, and the US subjects the least redistributive. Italian subjects seemed more willing to accept inequality differences due to individual merit than others. Conversely, Norwegian subjects demanded high levels of redistribution regardless of how inequality had been generated. Experimental redistribution is significantly higher in Norway than Italy, in spite of the two samples holding comparable views over social mobility. This calls for a re-examination of existing theories that see beliefs on mobility as the main explanation of demand for redistribution.

Suggested Citation

  • Francesco Farina & Gianluca Grimalda, 2011. "A cross-country experimental comparison of preferences for redistribution," Department of Economic Policy, Finance and Development (DEPFID) University of Siena 0211, Department of Economic Policy, Finance and Development (DEPFID), University of Siena.
    • Handle: RePEc:usi:depfid:0211
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    2. Clark, Andrew E. & D'Ambrosio, Conchita, 2014. "Attitudes to Income Inequality: Experimental and Survey Evidence," IZA Discussion Papers 8136, Institute of Labor Economics (IZA).
    3. Francesco Farina & Stefania Ottone & Ferruccio Ponzano, 2019. "On the Collective Choice among Models of Social Protection: An Experimental Study," Games, MDPI, vol. 10(4), pages 1-17, October.
    4. Thomas Buser & Louis Putterman & Joël van der Weele, 2016. "Gender and Redistribution: Experimental Evidence," Tinbergen Institute Discussion Papers 16-063/I, Tinbergen Institute.

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    More about this item

    Keywords

    Inequality; redistribution; individual merit; cross-country experiments.;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • P52 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

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