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Inequality and public good provision: An experimental analysis

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  • Anderson, Lisa R.
  • Mellor, Jennifer M.
  • Milyo, Jeffrey

Abstract

Recent studies report that economic inequality is associated with reduced government expenditures on social programs. Several prominent social scientists, including Putman (Putnam, R., 2000. Bowling Alone. Simon and Schuster, New York), attribute this to the detrimental "psychosocial effects" of group heterogeneity on cooperation. We test the hypothesis that inequality within a group reduces individual contributions in a public goods experiment. Unlike previous examinations of inequality and public good provision, we introduce inequality by manipulating the levels and distributions of fixed payments given to subjects. When made salient through public information about each individual's standing within the group, inequality reduces contributions to the public good for all group members.

Suggested Citation

  • Anderson, Lisa R. & Mellor, Jennifer M. & Milyo, Jeffrey, 2008. "Inequality and public good provision: An experimental analysis," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(3), pages 1010-1028, June.
    • Handle: RePEc:eee:soceco:v:37:y:2008:i:3:p:1010-1028
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    More about this item

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • H4 - Public Economics - - Publicly Provided Goods

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