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

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 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.

Redistribution in Whose Favor? Preferences with Regard to Types of Beneficiaries And Their Nationalities

“…Even when controlling for gender, age, married status, number of children, education, and unemployment, the authors find a correlation between risk aversion and the demand for redistribution. Assandri et al (2018) distinguish between a treatment and a control group in their laboratory experiment, which allows them to conclude that higher risk aversion is associated with stronger support of redistribution across members of a society that allows upward social mobility.…”

Risk attitude, risky behaviour and price determination in the sex market: A case study of Yangon, Myanmar

“…In recent years, the economic literature has invoked risk attitude to explain the economic behaviours of individuals in the real world. For instance, Assandri et al (2018) studied the relationship between risk attitude and redistribution preferences. Andreoni et al (2019) simultaneously explored the risk preferences of children and adolescents.…”