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Measuring Hypothetical Grandparents Preferences For Equality And Relative Standings

Author

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  • Johansson-Stenman, Olof

    (Department of Economics, School of Economics and Commercial Law, Göteborg University)

  • Carlsson, Fredrik

    (Department of Economics, School of Economics and Commercial Law, Göteborg University)

  • Daruvala, Dinky

    (Department of Economics)

Abstract

Individuals’ aversion to risk and inequality, and their concern for relative standing, are measured through experimental choices between hypothetical societies. It is found that on average individuals are both fairly inequality-averse and have a strong concern for relative income. The results are used to illustrate welfare consequences based on a utilitarian SWF and a modified CRRA utility function. It is shown that the social marginal utility of income may then become negative, even at income levels that are far from extreme.

Suggested Citation

  • Johansson-Stenman, Olof & Carlsson, Fredrik & Daruvala, Dinky, 2001. "Measuring Hypothetical Grandparents Preferences For Equality And Relative Standings," Working Papers in Economics 42, University of Gothenburg, Department of Economics.
    • Handle: RePEc:hhs:gunwpe:0042
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    References listed on IDEAS

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    Cited by:

    1. Markus Knell, 1999. "Social Comparisons, Inequality, and Growth," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 155(4), pages 664-664, December.
    2. Fredrik Carlsson & Dinky Daruvala & Olof Johansson‐Stenman, 2005. "Are People Inequality‐Averse, or Just Risk‐Averse?," Economica, London School of Economics and Political Science, vol. 72(287), pages 375-396, August.
    3. Alpizar, Francisco & Carlsson, Fredrik & Johansson-Stenman, Olof, 2005. "How much do we care about absolute versus relative income and consumption?," Journal of Economic Behavior & Organization, Elsevier, vol. 56(3), pages 405-421, March.
    4. Anke D. Wurzbacher, 2004. "Dynamic Ecological Constraints to Economic Growth," Department of Economics - Working Papers Series 909, The University of Melbourne.
    5. Seeun Jung & Yasuhiro Nakamoto, & Masayuki Sato & Katsunori Yamada, 2014. "Misperception of Consumption: Evidence from a Choice Experiment," THEMA Working Papers 2014-23, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    6. Armin Falk & Markus Knell, "undated". "Choosing the Joneses On the Endogeneity of Reference Groups," IEW - Working Papers 053, Institute for Empirical Research in Economics - University of Zurich.
    7. Leroux, Anke D. & Creedy, John, 2007. "Optimal land conversion and growth with uncertain biodiversity costs," Ecological Economics, Elsevier, vol. 61(2-3), pages 542-549, March.
    8. Håkan Eggert & Peter Martinsson, 2004. "Are Commercial Fishers Risk-Lovers?," Land Economics, University of Wisconsin Press, vol. 80(4).
    9. Nguyen, Quang, 2009. "Do fishermen have different preferences?: Insights from an experimental study and household data," MPRA Paper 16012, University Library of Munich, Germany.
    10. Johansson-Stenman, Olof, 2001. "Should We Use Distributional Weights in CBA When Income Taxes Can Deal with Equity?," Working Papers in Economics 35, University of Gothenburg, Department of Economics.
    11. Wendner, Ronald, 2008. "Externalities in a Model of Perpetual Youth with Age-Dependent Productivity," MPRA Paper 11335, University Library of Munich, Germany.

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    More about this item

    Keywords

    Well-being; Veil of ignorance; distributional considerations; welfare theory;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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