Specific egalitarianism? Inequality aversion across domains

Costa-Font, Joan ORCID: 0000-0001-7174-7919 and Cowell, Frank ORCID: 0000-0002-3778-2152 (2025) Specific egalitarianism? Inequality aversion across domains. Journal of Economic Inequality. ISSN 1569-1721 (In Press)

Text (2025_Mar_Specific_Egalitarianism_JEI) - Accepted Version Pending embargo until 1 January 2100. Download (636kB)

Abstract

An individual’s inequality aversion (IA) is a central preference parameter that captures the welfare sacrifice from exposure to inequality. However, it is far from trivial how best to elicit IA estimates. Also, little is known about the behavioural determinants of IA and how they differ across domains such as income and health. Using representative surveys from England, this paper elicits comparable estimates of IA in the health and income domains using two alternative elicitation techniques: a direct trade-off and an indirect “imaginary-grandchild” approach that results from the choices between hypothetical lotteries. We make three distinct contributions to the literature. First, we show that IA systematically differs between income and health domains. Average estimates are around 0.8 for health IA and range from 0.8 to 1.5 for income IA. Second, we find that risk aversion and locus of control are central determinants of IA in both income and health domains. Finally, we present evidence suggesting that the distribution and comparison of IA vary depending on the elicitation method employed.

Item Type:	Article
Additional Information:	© 2025 The Author
Divisions:	Health Policy Economics
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences
JEL classification:	H - Public Economics > H1 - Structure and Scope of Government > H10 - General I - Health, Education, and Welfare > I1 - Health > I18 - Government Policy; Regulation; Public Health
Date Deposited:	09 Jul 2025 09:00
Last Modified:	09 Jul 2025 09:06
URI:	http://eprints.lse.ac.uk/id/eprint/128734

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