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Choices in egalitarian distribution: inequality aversion versus risk aversion

By Yoram Kroll and Leima Davidovitz

Abstract

Inequality aversion and risk aversion are widely assumed features of economic models. But a review of the literature revealed that inequlity aversion and risk aversion are treated as separate variables. This paper presents exploratory research designed to separate inequality aversion from risk aversion. In a set of laboratory experiments, subjects chose between two alternatives with the same individuals risk, but different levels of egalitarianism. Thus, the choice of the more egalitarian alternative with constant risk level implies a higher level of inequality aversion. The experiment was conducted among 211 eight-year-old children, 107 of whom live on Kibbutz and 104 in the city. We found not significant difference between Kibbutz children and city children in inequality aversion

Topics: HB Economic Theory
Publisher: Suntory and Toyota International Centres for Economics and Related Disciplines, London School of Economics and Political Science
Year: 1999
OAI identifier: oai:eprints.lse.ac.uk:6582
Provided by: LSE Research Online

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