Traditional economic models typically posit that personal income is the sole concern of individuals regarding their support for redistribution policies. However, an international team of scholars from the University of Zurich, the University of Lille, and the University of Copenhagen is challenging this perspective.
Their research highlights that the general attitudes people hold towards inequality play a pivotal role in this context. Ernst Fehr, the study’s lead author and director of the UBS Center for Economics in Society at UZH’s Economics Department, explains, “Accounting for people’s distaste for inequality allows us to more accurately predict who will favour policies designed to narrow the income disparity.”
The study reveals that inequality aversion is not uniform but manifests in two distinct forms. Some individuals are primarily concerned with disadvantageous inequality, which relates to being worse off than others. In contrast, others are more affected by advantageous inequality, which involves discomfort at the existence of individuals who are poorer than themselves. These attitudes significantly vary across the population, and understanding their influence on political support for redistribution policies is still somewhat nascent.
Involving about 9,000 participants from Denmark, aged between 20 and 64, the researchers employed a behavioural experiment to gauge individual levels of inequality aversion. They then correlated these levels with the participants’ support for policies that enforce income redistribution through political means and their propensity for charitable giving, evidenced by real-life donations. These donations provide insight into their personal preferences for redistributing wealth.
The study’s findings indicate that individuals who exhibit a strong aversion to both types of inequality are more inclined to endorse political measures to redistribute wealth. Interestingly, the nature of inequality aversion also affects charitable behaviour: those who are particularly sensitive to advantageous inequality tend to be more generous, whereas those who are more concerned with disadvantageous inequality tend to give less.
Ernst Fehr summarizes, “Our research supports the theory of inequality aversion, which posits that a broad dislike for inequality significantly impacts both economic and political actions on individual and societal levels.”
More information: Ernst Fehr et al, Inequality aversion predicts support for public and private redistribution, Proceedings of the National Academy of Sciences. DOI: 10.1073/pnas.2401445121
Journal information: Proceedings of the National Academy of Sciences Provided by University of Zurich