Attitudes Towards Risk and Inequality: A Questionnaire-Experimental Approach

24 Pages Posted: 21 Feb 2008

See all articles by Yoram Amiel

Yoram Amiel

Ruppin Academic Center - Department of Economics and Management

Frank Cowell

London School of Economics & Political Science (LSE) - Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)

Date Written: June 2001

Abstract

Orderings of income distribution in terms of inequality should be closely related to orderings in terms of risk. Using a novel mult-country questgionnaire experiment we examine the basis for this claim in terms of respondents&apos' distributional perceptions. We show that in terms of both inequality and risk individuals consistently reject one of the standard axioms of distributional comparison. Moreover, there are significant differences in the &apos'maps&apos' of inequality and risk comparisons. Rejection of the orthodox approach is less likely to occur when distributional comparisons involve extremes of the distributions.We show that certain key background variables are overwhelmingly important in predisposing individuals toward acceptance or rejection of the orthodox basis for distributional comparisons. This paper forms part of the research programme of the TMR network Living Standards, Inequality and Taxation [Contract No. ERBFMRXCT 980248] of the European Communities whose financial support is gratefully acknowledged.

Suggested Citation

Amiel, Yoram and Cowell, Frank A., Attitudes Towards Risk and Inequality: A Questionnaire-Experimental Approach (June 2001). LSE STICERD Research Paper No. 56. Available at SSRN: https://ssrn.com/abstract=1094830

Yoram Amiel (Contact Author)

Ruppin Academic Center - Department of Economics and Management ( email )

Emek Hefer 40250
Israel

Frank A. Cowell

London School of Economics & Political Science (LSE) - Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD) ( email )

Houghton Street
London WC2A 2AE
United Kingdom
+44 (0)171-955 7277 (Phone)
+44 (0)171-242 2357 (Fax)

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