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Risk Attitudes and Preferences for Redistribution: New Evidence from the Lab

Author

Listed:
  • Matteo Assandri
  • Anna Maffioletti
  • Massimiliano Piacenza
  • Gilberto Turati

Abstract

Although preferences for redistribution have been widely studied in the economic literature, their relationship with risk preferences has received only marginal attention so far. The aim of this work is to provide evidence on this topic using a between-subject laboratory experiment and a fine grid to measure individual risk attitudes. Our findings suggest that the more the people are risk averse, the more they are in favor of redistribution across members of a society that allows upward social mobility, but it is also characterized by uncertainty about the final position in the income ladder. Our interpretation is that individuals exploit redistributive taxation as a form of insurance against uncertainty in the outcome of their effort.

Suggested Citation

  • Matteo Assandri & Anna Maffioletti & Massimiliano Piacenza & Gilberto Turati, 2018. "Risk Attitudes and Preferences for Redistribution: New Evidence from the Lab," CESifo Economic Studies, CESifo Group, vol. 64(3), pages 489-515.
    • Handle: RePEc:oup:cesifo:v:64:y:2018:i:3:p:489-515.
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    File URL: http://hdl.handle.net/10.1093/cesifo/ifx022
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    References listed on IDEAS

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    1. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde, 2010. "Are Risk Aversion and Impatience Related to Cognitive Ability?," American Economic Review, American Economic Association, vol. 100(3), pages 1238-1260, June.
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    Cited by:

    1. Hiroyuki Yamada & Yuki Kanayama & Kanako Yoshikawa & Kyaw Wai Aung, 2023. "Risk attitude, risky behaviour and price determination in the sex market: A case study of Yangon, Myanmar," Pacific Economic Review, Wiley Blackwell, vol. 28(5), pages 665-691, December.
    2. Giampaolo Arachi & Michele G Giuranno & Paola Profeta, 2018. "Introduction to the Special Issue ‘Inequality and Public Policies’, CESifo Economic Studies 2018," CESifo Economic Studies, CESifo Group, vol. 64(3), pages 339-344.
    3. Monica Bozzano & Simona Scabrosetti, 2024. "Preferences for Redistribution: Two Decades of Gender Gaps and Generational Differences in Europe," Working papers 113, Società Italiana di Economia Pubblica.
    4. Beraldo, Sergio & Piacenza, Massimiliano & Turati, Gilberto, 2022. "The importance of the future when deciding levels of personal responsibility and demand for redistribution," Economic Modelling, Elsevier, vol. 116(C).
    5. Bozzano, Monica & Profeta, Paola & Puglisi, Riccardo & Scabrosetti, Simona, 2024. "Women’s voice on redistribution: From gender equality to equalizing taxation," European Journal of Political Economy, Elsevier, vol. 81(C).

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    More about this item

    Keywords

    preferences for redistribution; risk attitudes; social mobility; uncertainty;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General

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