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Seminar

Measuring Tastes for Equity and Aggregate Wealth Behind the Veil of Ignorance

  • Location
    Erasmus University, Polak Building, Room 3-09
    Rotterdam
  • 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.

Paper: https://yanxu.me/wp-content/uploads/2019/04/Risk_and_VoI.pdf