What is Fair? Experimental Evidence on Fair Equality vs Fair Inequality

Nadja Dwenger, Ingrid Hoem Sjursen and Jasmin Vietz

No 19472, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Many societies aim to design policies based on meritocratic fairness, which involves two principles: (i) paying individuals with equal performance equally (fair equality) and (ii) paying individuals with higher performance more (fair inequality). Yet, often it is impossible to respect both simultaneously. This paper provides novel evidence on the importance individuals attach to each principle from a large-scale experiment in the United States. We document large heterogeneity in preferences. Individuals incur substantial personal costs to implement their preferred principle. Republican supporters are more likely to prefer fair inequality. The findings offer insights into the political economy of redistribution and public policy design.

Date: 2024-09
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