Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2023-04-12
Number: 23-019/V
Author-Name: Matthew Robson
Author-Workplace-Name: Erasmus University Rotterdam
Author-Name: Owen O’Donnell
Author-Workplace-Name: Erasmus University Rotterdam
Author-Name: Tom Van Ourti
Author-Workplace-Name: Erasmus University Rotterdam
Title: Aversion to Health Inequality - Pure, Income-Related and Income-Caused
Abstract: We design a novel experiment to identify aversion to pure (univariate) health inequality separately from aversion to income-related and income-caused health inequality.
Participants allocate resources to determine health of individuals. Identification comes
from random variation in resource productivity and in information on income and its
causal effect. We gather data (26,286 observations) from a UK representative sample
(n=337) and estimate pooled and participant-specific social preferences while accounting for noise. The median person has strong aversion to pure health inequality, challenging the health maximisation objective of economic evaluation. Aversion to health
inequality is even stronger when it is related to income. However, the median person
prioritises health of poorer individuals less than is assumed in the standard measure
of income-related health inequality. On average, aversion to that inequality does not
become stronger when low income is known to cause ill-health. There is substantial
heterogeneity in all three types of inequality aversion
Classification-JEL: C90, D30, D63, I14

Keywords: Inequality Aversion, Social Preferences, Health, Income, Experiment
File-URL: https://papers.tinbergen.nl/23019.pdf
File-Format: application/pdf
File-Size: 1.314.038  bytes
Handle: RePEc:tin:wpaper:20230019