IDEAS home Printed from https://ideas.repec.org/p/rtv/ceisrp/56.html
   My bibliography  Save this paper

Aversion to Inequality in Italy and its Determinants

Author

Listed:
  • Vincenzo Atella

    (University of Rome II - Faculty of Economics)

  • Jay S. Coggins

    (University of Minnesota - Twin Cities - Department of Applied Economics)

  • Federico Perali

    (University of Verona - Department of Economics)

Abstract

The main goal of this paper is to estimate the preferences of the Italian society towards equity in order to verify whether preferences i) have changed across the years, and ii) can be related to specific sociodemographic characteristics. Introducing equity concerns in the implementation of economic policies is a fundamental problem faced by both economists and policy makers. This paper uses a social welfare function a la Jorgenson and Slesnick to estimate society's aversion towards inequality by implementing a voting scheme for compiling individuals' equity preferences into a social choice by majority rule. The results show that preferences are highly polarized toward a low and a high concern for equity aversion and that this concern is significantly related with several sociodemographic characteristics. Among them, income plays an important role with richer people tending to favor less equity. Results also show that preferences towards equity have changed across the years.

Suggested Citation

  • Vincenzo Atella & Jay S. Coggins & Federico Perali, 2004. "Aversion to Inequality in Italy and its Determinants," CEIS Research Paper 56, Tor Vergata University, CEIS.
    • Handle: RePEc:rtv:ceisrp:56
    as

    Download full text from publisher

    File URL: https://ceistorvergata.it/RePEc/rpaper/No-56-Atella.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Kevin W. S. Roberts, 1980. "Interpersonal Comparability and Social Choice Theory," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 47(2), pages 421-439.
    2. Roland Benabou & Efe A. Ok, 2001. "Social Mobility and the Demand for Redistribution: The Poum Hypothesis," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(2), pages 447-487.
    3. Maurice Salles, 2016. "Social choice," Chapters, in: Gilbert Faccarello & Heinz D. Kurz (ed.), Handbook on the History of Economic Analysis Volume III, chapter 36, pages 518-537, Edward Elgar Publishing.
    4. BLACKORBY, Charles & BOSSERT, Walter, 2004. "Interpersonal Comparisons of Well-Being," Cahiers de recherche 2004-06, Universite de Montreal, Departement de sciences economiques.
    5. Hirschman, Albert O., 1973. "The changing tolerance for income inequality in the course of economic development," World Development, Elsevier, vol. 1(12), pages 29-36, December.
    6. Alesina, Alberto & Di Tella, Rafael & MacCulloch, Robert, 2004. "Inequality and happiness: are Europeans and Americans different?," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 2009-2042, August.
    7. Sen, Amartya K, 1979. "Personal Utilities and Public Judgements: Or What's Wrong with Welfare Economics?," Economic Journal, Royal Economic Society, vol. 89(355), pages 537-558, September.
    8. Anthony Atkinson & Timothy Smeeding & Lee Rainwater, 1994. "Income Distribution in European Countries," LIS Working papers 121, LIS Cross-National Data Center in Luxembourg.
    9. Coggins, Jay S. & Perali, C. Federico, 1993. "Voting for Equity: Estimating Society's Preferences Toward Inequality," Staff Papers 200567, University of Wisconsin-Madison, Department of Agricultural and Applied Economics.
    10. Claude D'Aspremont & Louis Gevers, 1977. "Equity and the Informational Basis of Collective Choice," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 44(2), pages 199-209.
    11. Jorgenson, Dale W & Slesnick, Daniel T, 1987. "Aggregate Consumer Behavior and Household Equivalence Scales," Journal of Business & Economic Statistics, American Statistical Association, vol. 5(2), pages 219-232, April.
    12. Jorgenson, Dale W. & Slesnick, Daniel T., 1990. "Inequality and the standard of living," Journal of Econometrics, Elsevier, vol. 43(1-2), pages 103-120.
    13. Arthur Lewbel, 1985. "A Unified Approach to Incorporating Demographic or Other Effects into Demand Systems," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 52(1), pages 1-18.
    14. Amartya Sen, 1999. "The Possibility of Social Choice," American Economic Review, American Economic Association, vol. 89(3), pages 349-378, June.
    15. Alesina, Alberto & La Ferrara, Eliana, 2005. "Preferences for redistribution in the land of opportunities," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 897-931, June.
    16. Kevin W. S. Roberts, 1980. "Possibility Theorems with Interpersonally Comparable Welfare Levels," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 47(2), pages 409-420.
    17. Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-927, October.
    18. Vincenzo Atella & Martina Menon & Federico Perali, 2003. "Estimation of Unit Values in Cross Sections without Quantity Information and Implications for Demand and Welfare Analysis," CEIS Research Paper 12, Tor Vergata University, CEIS.
    19. Yoram Amiel & John Creedy & Stan Hurn, 1999. "Measuring Attitudes Towards Inequality," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(1), pages 83-96, March.
    20. Dale W. Jorgenson, 1997. "Welfare - Vol. 2: Measuring Social Welfare," MIT Press Books, The MIT Press, edition 1, volume 2, number 0262100630, April.
    21. Jorgenson, Dale W, 1990. "Aggregate Consumer Behavior and the Measurement of Social Welfare," Econometrica, Econometric Society, vol. 58(5), pages 1007-1040, September.
    22. Albert O. Hirschman & Michael Rothschild, 1973. "The Changing Tolerance for Income Inequality in the Course of Economic DevelopmentWith A Mathematical Appendix," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 87(4), pages 544-566.
    23. Pollak, Robert A & Wales, Terence J, 1981. "Demographic Variables in Demand Analysis," Econometrica, Econometric Society, vol. 49(6), pages 1533-1551, November.
    24. Blackorby, Charles & Donaldson, David, 1988. "Money metric utility: A harmless normalization?," Journal of Economic Theory, Elsevier, vol. 46(1), pages 120-129, October.
    25. Romer, Thomas, 1975. "Individual welfare, majority voting, and the properties of a linear income tax," Journal of Public Economics, Elsevier, vol. 4(2), pages 163-185, February.
    26. Anthony Downs, 1957. "An Economic Theory of Political Action in a Democracy," Journal of Political Economy, University of Chicago Press, vol. 65(2), pages 135-135.
    27. Daniel T. Slesnick, 1998. "Empirical Approaches to the Measurement of Welfare," Journal of Economic Literature, American Economic Association, vol. 36(4), pages 2108-2165, December.
    28. Sen, Amartya, 1973. "On Economic Inequality," OUP Catalogue, Oxford University Press, number 9780198281931.
    29. Buccola, Steven T & Sukume, Chrispen, 1993. "Social Welfare of Alternative Controlled-Price Policies," The Review of Economics and Statistics, MIT Press, vol. 75(1), pages 86-96, February.
    30. Blackorby, Charles & Boyce, Richard & Russell, R Robert, 1978. "Estimation of Demand Systems Generated by the Gorman Polar Form: A Generalization of the S-Branch Utility Tree," Econometrica, Econometric Society, vol. 46(2), pages 345-363, March.
    31. Lewbel, Arthur, 1989. "Household equivalence scales and welfare comparisons," Journal of Public Economics, Elsevier, vol. 39(3), pages 377-391, August.
    32. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-326, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Olivier Bargain & Mathias Dolls & Dirk Neumann & Andreas Peichl & Sebastian Siegloch, 2011. "Tax-Benefit Systems in Europe and the US: Between Equity and Efficiency," CESifo Working Paper Series 3534, CESifo.
    2. Piera Mazzoleni & Elisa Pagani & Federico Perali, 2019. "The curvature properties of social welfare functions," Working Papers 493, ECINEQ, Society for the Study of Economic Inequality.
    3. Piera Mazzoleni & Elisa Pagani & Federico Perali, 2023. "On the Curvature Properties of “Long” Social Welfare Functions," Mathematics, MDPI, vol. 11(7), pages 1-14, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Coggins, Jay S. & Perali, C. Federico, 1993. "Voting for Equity: Estimating Society's Preferences Toward Inequality," Staff Papers 200567, University of Wisconsin-Madison, Department of Agricultural and Applied Economics.
    2. Piera Mazzoleni & Elisa Pagani & Federico Perali, 2023. "On the Curvature Properties of “Long” Social Welfare Functions," Mathematics, MDPI, vol. 11(7), pages 1-14, March.
    3. Marc Suhrcke, 2001. "Preferences for Inequality: East vs. West," Papers inwopa01/17, Innocenti Working Papers.
    4. Piera Mazzoleni & Elisa Pagani & Federico Perali, 2019. "The curvature properties of social welfare functions," Working Papers 493, ECINEQ, Society for the Study of Economic Inequality.
    5. Malte LÜBKER, 2004. "Globalization and perceptions of social inequality," International Labour Review, International Labour Organization, vol. 143(1-2), pages 91-128, March.
    6. Clark, Andrew E. & D'Ambrosio, Conchita, 2014. "Attitudes to Income Inequality: Experimental and Survey Evidence," IZA Discussion Papers 8136, Institute of Labor Economics (IZA).
    7. Neher, Frank, 2012. "Preferences for redistribution around the world," Discussion Papers 2012/2, Free University Berlin, School of Business & Economics.
    8. Pfarr Christian & Ulrich Volker, 2011. "Discrete-Choice-Experimente zur Ermittlung der Präferenzen für Umverteilung," Review of Economics, De Gruyter, vol. 62(3), pages 232-262, December.
    9. Bernasconi, Michele, 2006. "Redistributive taxation in democracies: Evidence on people's satisfaction," European Journal of Political Economy, Elsevier, vol. 22(4), pages 809-837, December.
    10. Neher, Frank, 2012. "Preferences for Redistribution around the World," Working Papers 26/2012, Universidade Portucalense, Centro de Investigação em Gestão e Economia (CIGE).
    11. Lübker, Malte., 2005. "Globalization and perceptions of social inequality," ILO Working Papers 993761673402676, International Labour Organization.
    12. repec:dau:papers:123456789/4382 is not listed on IDEAS
    13. repec:pra:mprapa:91766 is not listed on IDEAS
    14. Elvire Guillaud, 2013. "Preferences for redistribution: an empirical analysis over 33 countries," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 11(1), pages 57-78, March.
    15. Jo Thori Lind & Dominic Rohner, 2017. "Knowledge is Power: A Theory of Information, Income and Welfare Spending," Economica, London School of Economics and Political Science, vol. 84(336), pages 611-646, October.
    16. Christian Bredemeier, 2014. "Imperfect information and the Meltzer-Richard hypothesis," Public Choice, Springer, vol. 159(3), pages 561-576, June.
    17. Laméris, Maite D. & Garretsen, Harry & Jong-A-Pin, Richard, 2020. "Political ideology and the intragenerational prospect of upward mobility," European Journal of Political Economy, Elsevier, vol. 62(C).
    18. Vladimir Gimpelson & Daniel Treisman, 2018. "Misperceiving inequality," Economics and Politics, Wiley Blackwell, vol. 30(1), pages 27-54, March.
    19. Juliana Londoño-Vélez, 2022. "The Impact of Diversity on Perceptions of Income Distribution and Preferences for Redistribution," NBER Working Papers 30386, National Bureau of Economic Research, Inc.
    20. Elvire Guillaud, 2008. "Preferences for redistribution: a European comparative analysis," Working Papers halshs-00586260, HAL.
    21. Londoño-Vélez, Juliana, 2022. "The impact of diversity on perceptions of income distribution and preferences for redistribution," Journal of Public Economics, Elsevier, vol. 214(C).
    22. Peihua Deng & Ronnie Schöb, 2022. "Group-Specific Redistribution, Inequality, and Subjective Well-Being in China," CESifo Working Paper Series 9847, CESifo.

    More about this item

    Keywords

    Household Behavior ; Economic Welfare; Personal Income and Wealth Distribution;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D6 - Microeconomics - - Welfare Economics
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rtv:ceisrp:56. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Barbara Piazzi (email available below). General contact details of provider: https://edirc.repec.org/data/csrotit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.