Measuring Attitudes Towards Inequality

Abstract

Individuals' attitudes to inequality aversion are measured using survey data, based on the leaky‐bucket experiment, for several groups of students in Australia and Israel. Three forms of social welfare function are estimated. It is found that measures of inequality aversion can be obtained with some precision and that these estimates are substantially lower than the values typically used by those measuring inequality and examining optimal tax structures. Furthermore, a welfare function based on the Gini inequality measure is generally found to give a better fit than forms based on constant relative or constant absolute inequality aversion. JEL Classification: C91; D63