A Tale of Two Cities: An Experiment on Inequality and Preferences

Quaderni - Working Paper DSE N° 1128

55 Pages Posted: 3 Apr 2019

See all articles by Maria Bigoni

Maria Bigoni

University of Bologna - Department of Economics; IZA Institute of Labor Economics

Stefania Bortolotti

MPI for Research on Collective Goods

Veronica Rattini

University of Bologna - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: March 8, 2019

Abstract

We study how differences in socio-economic background correlate with preferences and beliefs, in a sample of college students born in a mid-sized Italian city. Our findings indicate that participants living in an area characterized by a high socio-economic environment tend to trust more and are more inclined to reciprocate higher levels of trust, as compared to those coming from less wealthy neighborhoods. This behavioral difference is, at least in part, driven by heterogeneities in beliefs: subjects from the most affluent part of the city have more optimistic expectations on their counterpart's trustworthiness than those living in a lower socio-economic environment. By contrast, no significant differences emerge in other preferences: generosity, risk-attitudes, and time preferences. Finally, we do not find any systematic evidence of out-group discrimination based on neighborhood identity.

Keywords: Socio Economic Status, Beliefs, Generosity, Risk attitudes, Time preferences, Trust, Trustworthiness

JEL Classification: C90, D31, D63, R23

Suggested Citation

Bigoni, Maria and Bortolotti, Stefania and Rattini, Veronica, A Tale of Two Cities: An Experiment on Inequality and Preferences (March 8, 2019). Quaderni - Working Paper DSE N° 1128. Available at SSRN: https://ssrn.com/abstract=3350360 or http://dx.doi.org/10.2139/ssrn.3350360

Maria Bigoni (Contact Author)

University of Bologna - Department of Economics ( email )

Piazza Scaravilli 2
Bologna, Bologna 40126
Italy
+390512098134 (Phone)

HOME PAGE: http://https://www.unibo.it/sitoweb/maria.bigoni/en

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Stefania Bortolotti

MPI for Research on Collective Goods ( email )

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

Veronica Rattini

University of Bologna - Department of Economics ( email )

Strada Maggiore 45
Bologna, 40125
Italy

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