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Stated and revealed inequality aversion in three subject pools.

Benjamin Beranek1, Robin Cubitt1, Simon Gächter2

  • 1Centre for Decision Research and Experimental Economics, School of Economics, Sir Clive Granger Building, University Park, Nottingham NG7 2RD.

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Summary

This study compares stated and revealed inequality aversion across diverse participants. Revealed aversion to advantageous inequality was often stronger than to disadvantageous inequality.

Keywords:
MTurkinequality aversionreplicationrevealed and stated preferencesrobustness across subject pools

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Area of Science:

  • Behavioral Economics
  • Experimental Economics
  • Social Psychology

Background:

  • Inequality aversion influences economic decisions.
  • Previous studies by Loewenstein et al. (1989) and Blanco et al. (2011) explored stated and revealed inequality aversion.
  • Replication and individual-level comparison of these preferences are valuable.

Purpose of the Study:

  • To replicate and extend previous findings on inequality aversion.
  • To compare stated and revealed preferences at the individual level.
  • To assess the robustness of inequality aversion parameters across different subject pools (UK university, Turkish university, Amazon Mechanical Turk).

Main Methods:

  • Utilized experimental techniques adapted from Loewenstein et al. (1989) and Blanco et al. (2011).
  • Collected data from 717 subjects across three distinct populations.
  • Employed a novel design enabling direct comparison of stated and revealed preferences for individuals.

Main Results:

  • Stated inequality aversion findings were qualitatively similar to Loewenstein et al. across all subject pools.
  • Revealed preference findings showed notable differences compared to Blanco et al.
  • Revealed aversion to advantageous inequality was frequently stronger than aversion to disadvantageous inequality.
  • A weak correlation was observed between stated and revealed inequality aversion parameters in most subject pools.

Conclusions:

  • Replicated key findings on stated inequality aversion but identified divergences in revealed preferences.
  • Highlighted the stronger impact of advantageous inequality aversion in revealed preferences.
  • Demonstrated the generalizability of stated inequality aversion findings while noting variations in revealed preferences across diverse subject pools.