Preferences for Redistribution in the Land of Opportunities

Alesina, Alberto; Ferrara, Eliana La

doi:10.3386/w8267

Cited by 436 publications

(672 citation statements)

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“…The term inequity aversion can be applied to the process of the chips distribution. Whereas in the game the participants were forcing egalitarian distribution of chips, in real life, this creates preferences for redistribution (Alesina and La Ferrara, 2005;Benz et al, 2002). If one cares only about the outcome, he will be less likely to support redistributive policies because if he gets rich he becomes a net payer.…”

Section: Discussionmentioning

confidence: 99%

The value of sociality

2014

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Federation. AbstractPurpose -This paper aims to study the value of sociality. Recent experimental evidence has brought to light that the assumptions of the Prospect Theory by Kahneman and Tversky do not hold in the proposed substantive domain of "sociality". In particular, the desire to be a part of the social environment, i.e. the environment where individuals make decisions among their peers, is not contingent on the framing. Evolutionary psychologists suggest that humans are "social animals" for adaptive reasons. However, entering a social relationship is inherently risky. Therefore, it is extremely important to know how much people value "sociality", when the social outcomes are valued more than material outcomes and what kinds of adaptations people use. Design/methodology/approach -We develop a new theory and propose the general utility function that features "sociality" component. We test the theory in the laboratory experiments carried out in several countries.Findings -Our results suggest that when stakes are low the theory of "sociality" is successful in predicting individual decisions: on average, people do value "sociality" and it surpasses the monetary loss. Originality/value -The main contribution of this paper is the breakdown of the risk attitudes under low stakes and individual level of decision-making. Another advancement is the ability to formalize the social utility or the theory of "sociality" in an economic model; we use general utility function that we define both on the outcomes and on the process of the decision-making itself and test in laboratory studies.

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Section: Discussionmentioning

confidence: 99%

The value of sociality

2014

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“…As a subjective factor in wage determination, fairness may be an important criterion which shapes lay attitudes of wage determination (see Paul, 2006) and may help to explain otherwise anomalous patterns in the data. Moreover, the relation of perceived fairness with wage determination may have a practical outcome: when the public perceives wage differentials as being unjust, it may take sociopolitical and economic action to rectify any perceived discrepancy (see Adams, 1965;Alesina & La Ferrara, 2005).…”

Section: Discussionmentioning

confidence: 99%

A Fair Day's Wage? Perceptions of Public Sector Pay

et al. 2009

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There is a scarcity of evidence pertaining to the general public's perception of public sector pay. Hence, in the present study, 161 women and 149 men were asked to estimate the wages 35 public sector professions should receive annually in the fictitious nation of Maldoria, based on a comparison value of an annual income of T10,000 for general practitioners. Analysis showed that only pilots were given a higher annual income than general practitioners; miners and local government workers were also provided with relatively high annual incomes. By contrast, newscasters were provided with the lowest annual income. Participants' sex did not affect these evaluations, and other demographic variables and public sector-related information of the participants were poor predictors of their evaluations. The implications of this research on public attitudes toward wage determination are discussed, and avenues for further research highlighted.

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“…The data presented above (as well as that provided by Alesina and La Ferrara 2001) suggest that there is "American exceptionalism," but that it relates not to the actual degree of vertical mobility in American society, but Americans' exceptionally strong belief that they live in a land of highly fluid vertical mobility, a land of relatively equal opportunity.…”

Section: Saving Rates and Perceptions Of The Potential For Vertical Mmentioning

confidence: 91%

“…These differences may also help explain Americans' stronger embrace of laissez-faire political ideology (see also, Lipset 1998). Alesina and La Ferrara (2001) find that in the United States, those individuals who believe they will experience future income growth more readily oppose measures that would redistribute income in favor of the less-well off. Other evidence also suggests that to a greater extent Americans hold individuals responsible for their own fates.…”

Section: Saving Rates and Perceptions Of The Potential For Vertical Mmentioning

confidence: 94%

Household Saving, Class Identity, and Conspicuous Consumption

Wisman

2009

Journal of Economic Issues

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The saving rate for U.S. households has long been low relative to those in other wealthy countries and in recent decades this rate has plummeted. Most studies of household saving behavior are based on the life-cycle theory of saving. However, there is doubt as to whether these studies adequately explain the low and declining rate in the United States. This study explores two hypotheses that depart from the life-cycle explanatory framework. The first hypothesis examines the possibility that the low rate of household saving in the United States is related to Americans' strong belief that vertical mobility in the United States is readily possible and hence their relatively weak sense of class identity. A second corollary hypothesis is that in an economy in which a high degree of vertical mobility is thought possible, a high degree of inequality in the distribution of income and wealth may reinforce the tendency to save little.

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Preferences for Redistribution in the Land of Opportunities

Cited by 436 publications

References 0 publications

The value of sociality

The value of sociality

A Fair Day's Wage? Perceptions of Public Sector Pay

Household Saving, Class Identity, and Conspicuous Consumption

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