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Self-centered and non-self-centered inequality aversion matter: Evidence from Uruguay based on an experimental survey

Santiago Burone () and Martin Leites ()
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Santiago Burone: IECON - Universidad de La República
Martin Leites: IECON - Universidad de La República

The Journal of Economic Inequality, 2021, vol. 19, issue 2, No 3, 265-291

Abstract: Abstract In this paper we provide evidence on the empirical relevance of two notions of inequality aversion that have been explored in the literature: self-centered and non-self-centered inequality aversion. We used a flexible model and designed an experimental survey that allowed us to address jointly both of these notions of inequality aversion and to distinguish their relevance. The survey was administered to a sample of first-year University students in Uruguay. The findings confirm the empirical relevance of both notions of aversion to inequality in a developing country. Most study participants exhibited non-self-centered inequality aversion, while a minority of the individuals in our sample appeared to favor inequality. In general the magnitude of aversion to inequality varied as a function of individuals’ position in the income distribution. self-centered income aversion is influenced by many factors, which is manifested in the fact that the magnitude of its parameters is more heterogeneous in compression to non-self centered aversion. In a minority of individuals, self-centered aversion has zero effect, and they are more willing to pay to reduce non-self-centered inequality. Finally, considering both notions together may help prevent bias in the measurement of inequality aversion.

Keywords: Self-centered inequality aversion; Non-self-centered inequality aversion; Relative income; Social preferences; Experimental survey (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/s10888-021-09479-6

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