Human capital and economic development

Robert F Tamura ()

No 2004-34, Working Paper from Federal Reserve Bank of Atlanta

Abstract: This paper reports the results of experiments designed to examine whether a taste for fairness affects people’s preferred tax structure. Building on the Fehr and Schmidt (1999) model, we devise a simple test for the presence of social preferences in voting for alternative tax structures. The experimental results show that individuals demonstrate concern for their own payoff and inequality aversion in choosing among alternative tax structures. However, concern for redistribution decreases when it leads to increasing deadweight losses. Our findings have important implications for the design of optimal tax theory.

New Economics Papers: this item is included in nep-afr, nep-dev and nep-pol
Date: 2004
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Related works:
Working Paper: Human capital and economic development (2002)
Journal Article: Human capital and economic development (2006)
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