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

National University Singapore; Barcelona School of Economics; IZA; CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR)

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)

National University Singapore ( email )

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

Barcelona School of Economics ( email )

Carrer de Ramon Trias Fargas, 25-27
Barcelona, 08005
Spain

IZA ( email )

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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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