Preferences for Redistribution and Perception of Fairness: An Experimental Study

Forthcoming, Journal of the European Economic Association

48 Pages Posted: 14 Aug 2013

See all articles by Ruben Durante

Ruben Durante

Catalan Institution of Research and Advanced Studies (ICREA); Universitat Pompeu Fabra, Department of Economics and Business, Students

Louis Putterman

Brown University - Department of Economics

Joel J. van der Weele

University of Amsterdam - Center for Experimental Economics and political Decision making (CREED); Tinbergen Institute; Center for Financial Studies (CFS)

Date Written: August 6, 2013

Abstract

We conduct a laboratory experiment to study how demand for redistribution of income depends on self-interest, insurance motives, and social concerns relating to inequality and efficiency. Our choice environments feature large groups of subjects and real world framing, and differ with respect to the source of inequality (earned or arbitrary), the cost of taxation to the decision maker, the dead-weight loss of taxation, uncertainty about own pre-tax income, and whether the decision maker is affected by redistribution. We estimate utility weights for the different sources of demand for redistribution, with the potential to inform modeling in macroeconomics and political economy.

Keywords: income distribution, political economy, redistribution, social preferences

JEL Classification: D31, P16, H24, C91

Suggested Citation

Durante, Ruben and Putterman, Louis G. and van der Weele, Joel J., Preferences for Redistribution and Perception of Fairness: An Experimental Study (August 6, 2013). Forthcoming, Journal of the European Economic Association, Available at SSRN: https://ssrn.com/abstract=2309608

Ruben Durante (Contact Author)

Catalan Institution of Research and Advanced Studies (ICREA) ( email )

P/ Lluis Companys 23
Barcelona, 08010
Spain

Universitat Pompeu Fabra, Department of Economics and Business, Students ( email )

Barcelona
Spain

HOME PAGE: http://www.rubendurante.net

Louis G. Putterman

Brown University - Department of Economics ( email )

Box B
Providence, RI 02912
United States
401-863-3837 (Phone)
401-863-1970 (Fax)

Joel J. Van der Weele

University of Amsterdam - Center for Experimental Economics and political Decision making (CREED) ( email )

Roetersstraat 11
Amsterdam, 1018 WB
Netherlands

HOME PAGE: http://https://sites.google.com/site/joelvdweele/

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Center for Financial Studies (CFS) ( email )

Grüneburgplatz 1
Frankfurt am Main, 60323
Germany

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