VOTING FOR EQUITY: ESTIMATING SOCIETY'S PREFERENCES TOWARD INEQUALITY*

Jay S. Coggins () and Federico Perali ()

CHILD Working Papers from CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY

Abstract: Incorporating equity considerations in comparisons of economic policies is always challenging. This paper uses a social welfare function, a la Jorgenson and Slesnick, incorporating both e±ciency and equity to estimate society's preferences toward inequality. The function is based upon a demographically modified demand system that delivers an interpersonally comparable measure of individual welfare that aggregates exactly in a social welfare function. Our innovation is the development of a voting scheme for compiling individuals' equity preferences into a social decision. It is found that while preferences across households are heterogeneous, the Colombian preferences toward inequality are polarized around a low and a high degree of aversion to inequality. By majority rule, the Colombian society prefers the maximum possible equity. However, the most prosperous and educated deciles and the households living in Bogotà vote for higher inequality.

Keywords: Aversion to inequality; voting; social welfare functions; interpersonal comparability (search for similar items in EconPapers)
JEL-codes: C10 D10 J10 (search for similar items in EconPapers)
Date: Written
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