IDEAS home Printed from https://ideas.repec.org/p/wpc/wplist/wp04_00.html
   My bibliography  Save this paper

Voting For Equity: Estimating Society'S Preferences Toward Inequality

Author

Listed:
  • Jay S. Coggins
  • Federico Perali

Abstract

Incorporating equity considerations in comparisons of economic policies is always challenging. This paper uses a social welfare function, a la Jorgenson and Slesnick, incorporating both e±ciency and equity to estimate society's preferences toward inequality. The function is based upon a demographically modified demand system that delivers an interpersonally comparable measure of individual welfare that aggregates exactly in a social welfare function. Our innovation is the development of a voting scheme for compiling individuals' equity preferences into a social decision. It is found that while preferences across households are heterogeneous, the Colombian preferences toward inequality are polarized around a low and a high degree of aversion to inequality. By majority rule, the Colombian society prefers the maximum possible equity. However, the most prosperous and educated deciles and the households living in Bogotà vote for higher inequality.

Suggested Citation

  • Jay S. Coggins & Federico Perali, 2000. "Voting For Equity: Estimating Society'S Preferences Toward Inequality," CHILD Working Papers wp04_00, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
    • Handle: RePEc:wpc:wplist:wp04_00
    as

    Download full text from publisher

    File URL: http://www.child.carloalberto.org/images/wp/child4_2000.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. 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.
    3. Pollak, Robert A & Wales, Terence J, 1981. "Demographic Variables in Demand Analysis," Econometrica, Econometric Society, vol. 49(6), pages 1533-1551, November.
    4. Alberto Alesina & Dani Rodrik, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(2), pages 465-490.
    5. Blackorby, Charles & Donaldson, David, 1988. "Money metric utility: A harmless normalization?," Journal of Economic Theory, Elsevier, vol. 46(1), pages 120-129, October.
    6. 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.
    7. 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.
    8. 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.
    9. 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.
    10. Donaldson, D. & Pendakur, K., 1999. "Equivalent-Income Functions and Income-Dependent Equivalence Scales," Discussion Papers dp99-8, Department of Economics, Simon Fraser University.
    11. Ferreira, M. Luisa & Perali, C. Federico, 1992. "The Barten-Gorman Model in the Aids Frameword," Staff Papers 200555, University of Wisconsin-Madison, Department of Agricultural and Applied Economics.
    12. Ferreira, M. Luisa & Perali, C. Federico, 1992. "Is the IB Property Restrictive? Evidence from Time Series Data Using Different Demographic Specifications," Staff Papers 200560, University of Wisconsin-Madison, Department of Agricultural and Applied Economics.
    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. Persson, Torsten & Tabellini, Guido, 1994. "Is Inequality Harmful for Growth?," American Economic Review, American Economic Association, vol. 84(3), pages 600-621, June.
    15. 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.
    16. Amartya Sen, 1999. "The Possibility of Social Choice," American Economic Review, American Economic Association, vol. 89(3), pages 349-378, June.
    17. 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.
    18. 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.
    19. Slesnick, Daniel T, 1994. "Consumption, Needs and Inequality," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 35(3), pages 677-703, August.
    20. Yoram Amiel & John Creedy & Stan Hurn, 1999. "Measuring Attitudes Towards Inequality," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(1), pages 83-96, March.
    21. Lewbel, Arthur, 1989. "Household equivalence scales and welfare comparisons," Journal of Public Economics, Elsevier, vol. 39(3), pages 377-391, August.
    22. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-326, June.
    23. Jorgenson, Dale W, 1990. "Aggregate Consumer Behavior and the Measurement of Social Welfare," Econometrica, Econometric Society, vol. 58(5), pages 1007-1040, September.
    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. Vincenzo Atella & Jay Coggins & Federico Perali, 2005. "Aversion to inequality in Italy and its determinants," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 2(2), pages 117-144, January.
    2. Olivier Bargain & Amedeo Spadaro, 2008. "Optimal Taxation, Social Contract and the Four Worlds of Welfare Capitalism," Working Papers 200816, School of Economics, University College Dublin.
    3. Olivier Bargain & Claire Keane, 2010. "Tax–Benefit‐revealed Redistributive Preferences Over Time: Ireland 1987–2005," LABOUR, CEIS, vol. 24(s1), pages 141-167, December.
    4. Amedeo Spadaro, 2008. "Optimal taxation, social contract and the four worlds of welfare capitalism," Working Papers 98, ECINEQ, Society for the Study of Economic Inequality.
    5. Amadéo Spadaro, 2008. "Optimal taxation, social contract and the four worlds of welfare capitalism," Working Papers halshs-00586290, HAL.
    6. Rohit Malhorta, 2016. "Demystifying Optimal Welfare Weights Controversy From A Social Strategist Perspective," Journal of Social and Economic Statistics, Bucharest University of Economic Studies, vol. 5(2), pages 33-48, DECEMBER.

    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. Vincenzo Atella & Jay Coggins & Federico Perali, 2005. "Aversion to inequality in Italy and its determinants," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 2(2), pages 117-144, January.
    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. Yew‐Kwang Ng, 1981. "Bentham or Nash? On the Acceptable Form of Social Welfare Functions," The Economic Record, The Economic Society of Australia, vol. 57(3), pages 238-250, September.
    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. Blackorby, Charles & Bossert, Walter, 2004. "Interpersonal comparisons of well-being," Economic Research Papers 269605, University of Warwick - Department of Economics.
    6. Laura Blow, 2003. "Demographics in demand systems," IFS Working Papers W03/18, Institute for Fiscal Studies.
    7. Kotaro Suzumura, 2002. "Introduction to social choice and welfare," Temi di discussione (Economic working papers) 442, Bank of Italy, Economic Research and International Relations Area.
    8. Fabrizio Balli, 2012. "Are Traditional Equivalence Scales Still Useful? A Review and A Possible Answer," Department of Economics University of Siena 656, Department of Economics, University of Siena.
    9. Federico Perali, 2007. "Can PIGLOG preferences identify equivalence scales?," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 54(2), pages 248-260, June.
    10. Kevin Roberts, 2005. "Social Choice Theory and the Informational Basis Approach," Economics Series Working Papers 247, University of Oxford, Department of Economics.
    11. Srikanta Chatterjee & Claudio Michelini & Ranjan Ray, 1994. "Expenditure Patterns and Aggregate Consumer Behaviour: Some Experiments with Australian and New Zealand Data," The Economic Record, The Economic Society of Australia, vol. 70(210), pages 278-291, September.
    12. Boppart, Timo & Krusell, Per & Mitman, Kurt, 2018. "Exploiting MIT shocks in heterogeneous-agent economies: the impulse response as a numerical derivative," Journal of Economic Dynamics and Control, Elsevier, vol. 89(C), pages 68-92.
    13. Liu, Kang Ernest & Chern, Wen S., 2004. "Translating And Scaling Of Budget Shares: An Empirical Analysis Of Chinese Urban Household Demand For Meat," 2004 Annual meeting, August 1-4, Denver, CO 20001, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    14. Christian Bredemeier, 2014. "Imperfect information and the Meltzer-Richard hypothesis," Public Choice, Springer, vol. 159(3), pages 561-576, June.
    15. César Martinelli & John Duggan, 2014. "The Political Economy of Dynamic Elections: A Survey and Some New Results," Working Papers 1403, Centro de Investigacion Economica, ITAM.
    16. Peter ven de Ven & Anne Harrison & Barbara Fraumeni & Dale W. Jorgenson & Paul Schreyer, 2017. "Measuring Individual Economic Well-Being and Social Welfare within the Framework of the System of National Accounts," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 63, pages 460-477, December.
    17. Betti Gianni & Karadag Mehmet Ali & Sarica Ozlem & Ucar Baris, 2017. "Regional differences in equivalence scales in Turkey," Экономика региона, CyberLeninka;Федеральное государственное бюджетное учреждение науки «Институт экономики Уральского отделения Российской академии наук», vol. 13(1), pages 63-69.
    18. Davis, Lewis S., 2018. "Political economy of growth with a taste for status," Journal of Public Economics, Elsevier, vol. 168(C), pages 35-46.
    19. Charles Blackorby & Walter Bossert & David Donaldson, 2005. "Multi-profile welfarism: A generalization," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 24(2), pages 253-267, April.
    20. Pashardes, Panos, 1995. "Equivalence scales in a rank-3 demand system," Journal of Public Economics, Elsevier, vol. 58(1), pages 143-158, September.

    More about this item

    Keywords

    Aversion to inequality; voting; social welfare functions; interpersonal comparability;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • D10 - Microeconomics - - Household Behavior - - - General
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General

    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:wpc:wplist:wp04_00. 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: Giovanni Bert (email available below). General contact details of provider: https://edirc.repec.org/data/childit.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.