Measuring Tastes for Equity and Aggregate Wealth Behind the Veil of Ignorance
SeriesBrown Bag Seminars General Economics
SpeakerYan Xu (Erasmus University Rotterdam)
LocationErasmus University, Polak Building, Room 3-09
Date and time
September 25, 2019
12:00 - 13:00
Abstract: 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.