Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2018-11-16
Number: 18-087/I
Author-Name: Jan (J.P.M.) Heufer
Author-Email: heufer@ese.eur.nl
Author-Workplace-Name: Erasmus University Rotterdam, Erasmus School of Economics
Author-Name: Jason Shachat
Author-Email: jason.shachat@durham.ac.uk
Author-Workplace-Name: Durham University Business School, Wuhan University
Author-Name: Yan Xu
Author-Email: xu@ese.eur.nl
Author-Workplace-Name: Erasmus University Rotterdam, Erasmus School of Economics
Title: Measuring tastes for equity and aggregate wealth behind the veil of ignorance
Abstract: We propose an instrument to measure individuals' social preferences regarding equity and efficiency behind a veil of ignorance. We pair portfolio and wealth distribution choice problems which have a common budget set. For a given bundle, the distribution over an individual's wealth is the same for both problems. The portfolio choice serves as a benchmark to evaluate whether the wealth distribution choice exhibits equity or efficiency preferring tastes. We report experiments using a within-subject design testing the veracity of this instrument. We find clusters of equity preferring, efficiency preferring, and socially agnostic individuals through reduced form, revealed preference, and structural estimation analyses.
Classification-JEL: C14; C91; D11; D12; D63
Keywords: Inequity aversion; revealed preference; risk preferences; social preferences; veil of ignorance
File-URL: https://papers.tinbergen.nl/18087.pdf
File-Format: application/pdf
File-Size: 853231 bytes
Handle: RePEc:tin:wpaper:20180087