A Leaky Bucket in the Real World: Estimating Inequality Aversion Using Survey Data
Economica 77, 60–76 (2010).DOI: 10.1111/j.1468-0335.2008.00729.x
Posted: 22 Aug 2014
Date Written: 2010
Existing evidence of inequality aversion relies on data from class-room experiments where subjects face hypothetical questions. This paper estimates the magnitude of inequality aversion using representative survey data, with questions related to the real-economy situations the respondents face. The results reveal that inequality aversion can be measured in a meaningful way using survey data, but the magnitudes of the estimates depend dramatically on how inequality aversion is measured. No matter how measured, the revealed inequality aversion predicts opinions on a wide range of questions related to the welfare state, such as the level of taxation, tax progressivity and the structure of unemployment benefits.
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