We propose an instrument to measure individuals' social preferences regarding equity and efficiency behind a veil of ignorance. We pair portfolio and wealth distribution choice problems which have a common budget set. For a given bundle, the distribution over an individual's wealth is the same for both problems. The portfolio choice serves as a benchmark to evaluate whether the wealth distribution choice exhibits equity or efficiency preferring tastes. We report experiments using a within-subject design testing the veracity of this instrument. We find clusters of equity preferring, efficiency preferring, and socially agnostic individuals through reduced form, revealed preference, and structural estimation analyses.
# 18-087/I (2018-11-16)
- Jan (J.P.M.) Heufer, Erasmus University Rotterdam, Erasmus School of Economics; Jason Shachat, Durham University Business School, Wuhan University; Yan Xu, Erasmus University Rotterdam, Erasmus School of Economics
- Inequity aversion, revealed preference, risk preferences, social preferences, veil of ignorance
- JEL codes:
- C14, C91, D11, D12, D63