A Little Fairness May Induce a Lot of Redistribution in Democracy
U of St. Gallen, Economics Discussion Paper No. 2002-30
38 Pages Posted: 25 Feb 2003 Last revised: 17 Oct 2008
Date Written: December 1, 2002
We use a model of self-centered inequality aversion suggested by Fehr and Schmidt (1999) to study voting on redistribution. We theoretically identify two classes of conditions when an empirically plausible amount of fairness preferences induces redistribution through referenda. We test the predictions of the adapted inequality aversion model in a simple redistribution experiment, and find that it predicts voting outcomes far better than the standard model of voting assuming rationality and strict self-interest.
Keywords: Fairness, Voting, Redistribution
JEL Classification: D31, D63, D72
Suggested Citation: Suggested Citation