Distaste for Inequality? The Role of Risk Aversion

Ada Ferrer-i-Carbonell () and Xavier Ramos ()
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Ada Ferrer-i-Carbonell: Institute for Economic Analysis (CSIC)
Xavier Ramos: Universitat Autònoma de Barcelona

Chapter Chapter 9 in The Economics of Happiness, 2019, pp 195-215 from Springer

Abstract: Abstract Risk aversion is an important argument to explain why individuals may dislike inequality. However, this relationship has not been empirically tested for large representative samples. Using a representative panel for Germany, we estimate this relationship by linking subjective well-being (a proxy for utility), inequality, and self-reported risk attitudes. The results confirm that risk aversion has a positive effect on dislike for inequality: more risk averse individuals are also more inequality averse. This relationship however is partly driven by other individual characteristics (gender, education, and income) that are correlated with risk attitudes.

Keywords: Inequality aversion; Risk attitudes; Subjective well-being; German SOEP; Panel data (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-030-15835-4_9

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DOI: 10.1007/978-3-030-15835-4_9

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