International inequity aversion and the social cost of carbon

I define the rate of inequity aversion, distinguishing between the pure rate and the consumption rate. I measure the rate of aversion to inequality in consumption as expressed in the development aid given by rich countries to poor ones between 1965 and 2005. There is an ambiguous relationship between the pure rate of inequity aversion and the consumption rate, driven by the rate of risk aversion. However, for a reasonable choice of the rate of risk aversion, rich countries are shown to be inequity averse, and increasingly so over time. The social cost of carbon is very sensitive to equity weighting and assumptions about the rate of risk and inequity aversion. Estimates for the consumption rate of inequity aversion for recent data suggest that the equity-weighted social cost of carbon is less than 50% larger than the unweighted estimate.Inequity aversion, risk aversion, income distribution, development aid, climate change, social cost of carbon

Inequality, Inequity Aversion, and the Provision of Public Goods

We investigate the effects of inequality in wealth on the incentives to contribute to a public good when agents are inequity averse and may differ in ability. We show that equality may lead to a reduction of public good provision below levels generated by purely selfish agents. But introducing inequality motivates more productive agents to exert higher efforts and help the group to coordinate on equilibria with less free-riding. As a result, less able agents may benefit from initially disadvantageous inequality. Moreover, the more inequity averse the agents, the more inequality should be imposed even by an egalitarian social planner.public goods, inequality, inequity aversion, social welfare, voluntary provision, income distribution, heterogeneity

Individual Heterogeneity in Punishment and Reward

We design experiments to study the extent to which individuals differ in their motivations behind costly punishment and rewarding. Our findings qualify existing evidence and suggest that the largest fraction of players is motivated by a mixture of both inequity-aversion and reciprocity, while smaller fractions are primarily motivated by pure inequity-aversion and pure reciprocity. These findings provide new insights into the literature on other-regarding preferences and may help to reconcile important phenomena reported in the experimental literature on punishment and reward.Heterogeneity; inequity aversion; monetary punishment/reward; reciprocity; social norms.

On Inequity Aversion - A Reply to Binmore and Shaked

In this paper we reply to Binmore and Shaked’s criticism of the Fehr-Schmidt model of inequity aversion. We put the theory and their arguments into perspective and show that their criticism is not substantiated. Finally, we briefly comment on the main challenges for future research on social preferences.Experiments; other-regarding preferences; inequity aversion;

Using Different Approaches to Evaluate Individual Social Equity in Transport

Inequalities not only exist in the field of economics in relation to income and wealth, but also in other areas, such as the transport sector, where access to and use of different transport modes varies markedly across population groups, and which provides the means to access everyday living activities. A key concern within the transport sector is that inequality has extended beyond the traditional measures of travel, and now covers a wide range of effects relating to social exclusion, freedom, well-being and being able to access reasonable opportunities and resources. In order to address the aforementioned issues, an important question to resolve is what type of methods can be used to measure inequalities in transport most effectively. Therefore, this study aims to apply different approaches, including the Capabilities Approach (CA) and a further six inequality indices, namely the Gini coefficient, the Atkinson index, the Palma ratio, the Pietra ratio, the Schutz coefficient and the Theil index, to the case study using the relatively migrant-rich lower-income neighbourhood of Tuqiao, in Beijing, in order to assess individual transport-related social inequity issues. The findings suggest that the CA is useful in assessing transport-related inequalities where there are significant barriers to the take up of accessibility, for example where there are high levels of disadvantaged groups and disaggregated analysis can be undertaken. The Palma ratio appears to have a larger effect than the Gini coefficient and the other inequality indices when measuring transport-related social inequity. In addition, we also found that most income inequality methods adapted from econometrics may be better suited to measuring transport-related social inequity between different regions, cities or countries, or within the same area, but at different points in time, rather than to measuring a single neighbourhood as a whole. Finally, we argue that to what extent politicians or transport planners can use appropriate management tools to measure transport-related social inequalities may be significant in terms of the progress that can be made in the fight against social inequity in the transport field

Social Influences on Inequity Aversion in Children

Adults and children are willing to sacrifice personal gain to avoid both disadvantageous and advantageous inequity. These two forms of inequity aversion follow different developmental trajectories, with disadvantageous inequity aversion emerging around 4 years and advantageous inequity aversion emerging around 8 years. Although inequity aversion is assumed to be specific to situations where resources are distributed among individuals, the role of social context has not been tested in children. Here, we investigated the influence of two aspects of social context on inequity aversion in 4- to 9-year-old children: (1) the role of the experimenter distributing rewards and (2) the presence of a peer with whom rewards could be shared. Experiment 1 showed that children rejected inequity at the same rate, regardless of whether the experimenter had control over reward allocations. This indicates that children’s decisions are based upon reward allocations between themselves and a peer and are not attempts to elicit more favorable distributions from the experimenter. Experiment 2 compared rejections of unequal reward allocations in children interacting with or without a peer partner. When faced with a disadvantageous distribution, children frequently rejected a smaller reward when a larger reward was visible, even if no partner would obtain the larger reward. This suggests that nonsocial factors partly explain disadvantageous inequity rejections. However, rejections of disadvantageous distributions were higher when the larger amount would go to a peer, indicating that social context enhances disadvantageous inequity aversion. By contrast, children rejected advantageous distributions almost exclusively in the social context. Therefore, advantageous inequity aversion appears to be genuinely social, highlighting its potential relevance for the development of fairness concerns. By comparing social and nonsocial factors, this study provides a detailed picture of the expression of inequity aversion in human ontogeny and raises questions about the function and evolution of inequity aversion in humans

Looking Awkward When Winning and Foolish When Losing: Inequity Aversion and Performance in the Field

The experimental literature and studies using survey data have established that people care a great deal about their relative economic position and not solely, as standard economic theory assumes, about their absolute economic position. Individuals are concerned about social comparisons. However, behavioral evidence in the field is rare. This paper provides an empirical analysis, testing the model of inequity aversion using two unique panel data sets for basketball and soccer players. We find support that the concept of inequity aversion helps to understand how the relative income situation affects performance in a real competitive environment with real tasks and real incentives.Inequity aversion, relative income, positional concerns, envy, social comparison, performance, interdependent preferences

On Modeling Voluntary Contributions to Public Goods

This paper addresses four "stylized facts" that summarize data from experimental studies of voluntary contributions to provision of public goods. Theoretical propositions and testable hypotheses for voluntary contributions are derived from two models of social preferences, the inequity aversion model and the egocentric other-regarding preferences model. We find that the egocentric other-regarding preferences model with classical regularity properties can better account for the stylized facts than the inequity aversion model with non-classical properties.

Why might adults belong to outdoor walking groups? A qualitative study using photo-elicitation methods in a population with poor health and physical activity indicators

Walking groups have multiple health benefits but walking interventions tend to be socially patterned and have the potential to increase health inequity. This poster presented preliminary findings of a qualitative study with a new walking groups in an area of social deprivatio

The role of role uncertainty in modified dictator games

We compare behavior in modified dictator games with and without role uncertainty. Subjects choose between a selfish action, a costly surplus creating action (altruistic behavior) and a costly surplus destroying action (spiteful behavior). While costly surplus creating actions are the most frequent under role uncertainty (64%), selfish actions become the most frequent without role uncertainty (69%). Also, the frequency of surplus destroying choices is negligible with role uncertainty (1%) but not so without it (11%). A classification of subjects into four different types of interdependent preferences (Selfish, Social Welfare maximizing, Inequity Averse and Competitive) shows that the use of role uncertainty overestimates the prevalence of Social Welfare maximizing preferences in the subject population (from 74% with role uncertainty to 21% without it) and underestimates Selfish and Inequity Averse preferences. An additional treatment, in which subjects undertake an understanding test before participating in the experiment with role uncertainty, shows that the vast majority of subjects (93%) correctly understand the payoff mechanism with role uncertainty, but yet surplus creating actions were most frequent. Our results warn against the use of role uncertainty in experiments that aim to measure the prevalence of interdependent preferences.Role uncertainty, role reversal, interdependent preferences, social welfare, maximizing, inequity aversion, mixture-of-types models, strategy method, experiments., leex