Skip to main content

Advertisement

SpringerLink
Log in

Aversion to inequality in Italy and its determinants

  • Published:
The Journal of Economic Inequality Aims and scope Submit manuscript

Abstract

The main goal of this paper is to estimate the preferences of the Italian society towards equity in order to verify whether preferences (i) have changed across the years, and (ii) can be related to specific socio-demographic characteristics. Introducing equity concerns in the implementation of economic policies is a fundamental problem faced by both economists and policy makers. This paper uses a social welfare function à la Jorgenson and Slesnick to estimate society’s aversion towards inequality by implement in a voting scheme for compiling individuals’ equity preferences in to a social choice by majority rule. The results show that preferences are highly polarized toward a low and a high concern for equity aversion and that this concern is significantly related with several sociodemographic characteristics. Among them, income plays an important role with richer people tending to favor less equity. Results also show that preferences towards equity have changed across the years.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  1. Alesina, A. and La Ferrara, E.: Preferences for redistribution in the land of opportunities, NBER Working Paper No. 8267, 2001

  2. Alesina, A., Di Tella, R. and MacCulloch, R.: Inequality and happiness: Are Europeans and Americans different?, NBER Working Paper No. 8198, 2001.

  3. Amiel, Y., Creedy, J. and Hurn, S.: Measuring attitudes towards inequality, Scandinavian Journal of Economics 101 (1999),83–96.

    Google Scholar 

  4. Arrow, K.: Social Choice and Individual Values, 2nd edn, Yale University Press, New Haven, 1963.

    Google Scholar 

  5. Atella, V.: Quinto Rapporto CNEL sulla Distribuzione e Redistribuzione del Reddito in Italia e in Europa 1998–1999, Documenti CNEL, Roma, 2000.

    Google Scholar 

  6. Atella V., Menon, M. and Perali, F.: Estimation of unit values incross sections without quantity information and implications for demand and welfare analysis, In: C. Dagum and G. Ferrari (eds.), Household Behavior, Equivalence Scales, Welfare and Poverty, Physica-Verlag, Heidelberg, 2003.

    Google Scholar 

  7. Atkinson, A.B., Lee, R. and Smeeding, T.: Income distribution in european countries, In: A. Atkinson (ed.), Incomes and the Welfare State: Essays on Britain and Europe, Cambridge University Press,Cambridge, 1995.

    Google Scholar 

  8. Barten, A.P.: Family composition, prices, and expenditure patterns, In: P. Hart, L. Mills and J.K. Whitaker (eds.), Econometric Analysis for National Economic Planning, Butterworth Publishing, London, 1964.

    Google Scholar 

  9. Benassy, J.-P.: Developments in non-walrasian economics and the microeconomic foundations of macroeconomics, In: W. Hildenbrand (ed.), Advances in Economic Theory, Cambridge University Press,Cambridge, 1982.

    Google Scholar 

  10. Bénabou, R. and Ok, E.:Social mobility and the demand for redistribution: The POUM hypothesis, Quarterly Journal of Economics 116 (2001), 447–487.

    Google Scholar 

  11. Black, D.: On the rationale of group decision making, Journal of Political Economy 56 (1948), 23–34.

    Google Scholar 

  12. Blackorby, C. Boyce, R. and Russell, R.: Estimation of demand systems generated by the Gorman polar form: A generalization of the S-branch utility tree, Econometrica 46 (1978), 345–363.

    Google Scholar 

  13. Blackorby, C. and Donaldson, D.: Money metric utility: A harmless normalization?, Journal of Economic Theory 46 (1988),120–129.

    Google Scholar 

  14. Blackorby, C. and Donaldson, D.: Adult-equivalence scales, interpersonal comparisons of well-being, and applied welfare economics, In: J. Elster and J.E. Roemer (eds.), Interpersonal Comparisons of Well-Being, Cambridge University Press, Cambridge, 1991.

    Google Scholar 

  15. Blundell, R. and Lewbel, A.: The information content of equivalence scales, Journal of Econometrics 50 (1991), 1–19.

    Google Scholar 

  16. Buccola, S.T. and Sukume, C.: Social welfare of alternative controlled-price policies, Review of Economics and Statistics 75 (1993), 86–96.

    Google Scholar 

  17. Christiansen, V. and Jensen, E.S.: Implicit social preferences in the norwegian system of social preferences, Journal of Public Economics 10 (1978), 217–245.

    Google Scholar 

  18. Coggins, J. and Perali, F.: Voting for equity: Estimating society’s preferences toward inequality, Mimeo, University of Verona, 2002.

  19. Corneo, J. and Grüner, H.P.: Individual preferences for political redistribution, Journal of Public Economics, 2000.

  20. D’Aspremont, C. and Gevers, L.: Equity and the informational basis of collective choice, Review of Economic Studies 44 (1977), 199–209.

    Google Scholar 

  21. Deaton, A.S. and Muellbauer, J.: An almost ideal demand system, American Economic Review 70 (1980), 312–326.

    Google Scholar 

  22. Downs, A.: An Economic Theory of Democracy, Harper and Row Publishers, Inc., New York, 1957.

    Google Scholar 

  23. Fritzell, J.: Still different? Income distribution in the nordic countries in a european comparison, Luxembourg Income Study Working Paper No. 238, 1994.

  24. Gardner, R.: λ-transfer value and fixed-price equilibrium in two-sided markets, In: P.K. Pattanaik and M. Salles (eds.), Social Choice and Welfare, North-Holland, Amsterdam, 1983.

    Google Scholar 

  25. Gorman, W.M.: Tricks with utility functions, In: M.M. Artis and A.R. Nobay (eds.), Essays in Economic Analysis: Proceedings of the 1975 AUTE Conference, Cambridge University Press, Cambridge, 1976.

    Google Scholar 

  26. Hammond, P.J.: Interpersonal comparisons of utility: Why and how they are and should be made, In: J. Elster and J.E. Roemer (eds.), Interpersonal Comparisons of Well-Being, Cambridge University Press, Cambridge, 1991.

    Google Scholar 

  27. Hirschman, A.O.: The changing tolerance for income inequality in the course of economic development, with a mathematical appendix by Michael Rothschild, Quarterly Journal of Economics 87 (1973), 544–566.

    Google Scholar 

  28. Jorgenson, D.W.: Aggregate consumer behavior and the measurement of social welfare, Econometrica 58 (1990), 1007–1037.

    Google Scholar 

  29. Jorgenson, D.W.: Welfare - Measuring Social Welfare, MIT Press, Cambridge, 1997.

    Google Scholar 

  30. Jorgenson, D.W. and Slesnick, D.T.: Individual and social cost of living indices, In: W.E. Diewert and C. Montmarquetts (eds.), Price Level Measurement, Statistics Canada, Ottawa, 1983.

    Google Scholar 

  31. Jorgenson, D.W. and Slesnick, D.T.:Aggregate consumer behavior and household equivalence scales, Journal of Business and Economic Statistics 5 (1987), 219–232.

    Google Scholar 

  32. Jorgenson, D.W and Slesnick, D.: Inequality and the standard of living indexes, In: W.E. Diewert (ed.), Price Level Measurement, North-Holland, Amsterdam, 1990.

    Google Scholar 

  33. Lewbel, A.: A unified approach to incorporating demographic or other effects into demand systems, Review of Economic Studies 52 (1985), 1–18.

    Google Scholar 

  34. Lewbel, A.: Household equivalence scales and welfare comparisons, Journal of Public Economics 39 (1989), 377–391.

    Google Scholar 

  35. Lewbel, A.: Consumer demand system and household equivalence scales, In: M.H. Pesaran and P. Schmidt (eds.), Handobook of Applied Econometrics, Vol. II: Microeconomics, Blackwell Publishers, Cambridge, MA, 1997.

    Google Scholar 

  36. Meltzer, A. and Richards, S.: A rational theory of the size of government, Journal of Political Economy 89 (1981), 914–927.

    Google Scholar 

  37. Pollak, R.A. and Wales, T.J.: Demographic variables in demand analysis, Econometrica 49 (1981), 1533–1551.

    Google Scholar 

  38. Pollak, R.A. and Wales, T.J., Demand System Specification and Estimation, Oxford University Press, New York, 1992.

    Google Scholar 

  39. Roberts, K.W.S.: Interpersonal comparability and social choice theory, Review of Economic Studies 47 (1980), 421–439.

    Google Scholar 

  40. Roberts, K.W.S.: Possibility theorems with interpersonally comparable welfare levels, Review of Economic Studies 47 (1980), 409–420.

    Google Scholar 

  41. Romer, T.: Individual welfare, majority voting and the properties of a linear income tax, Journal of Public Economics 7 (1975),163–188.

    Google Scholar 

  42. Rossi, N.: Secondo rapporto CNEL sulla distribuzione e redistribuzione del reddito in Italia 1993–1994, Il Mulino, Bologna, 1994.

  43. Rossi, N.: Quarto rapporto CNEL sulla distribuzione e redistribuzione del reddito in Italia 1996–1997, Il Mulino, Bologna, 1998.

  44. Sen, A.K.: Collective Choice and Social Welfare, Holden-Day, San Francisco, 1970.

    Google Scholar 

  45. Sen, A.K.:On Economic Inequality, Clarendon Press, Oxford, 1973.

    Google Scholar 

  46. Sen, A.K.: Personal utilities and public judgements: Or what’s wrong with welfare economics, Economic Journal 89 (1979), 537–558.

    Google Scholar 

  47. Sen, A.K.: The possibility of social choice, American Economic Review 89 (1999), 349–378.

    Google Scholar 

  48. Slesnick, D. Empirical approaches to the measurement of welfare, Journal of Economic Literature 36 (1998), 2108–2165.

    Google Scholar 

  49. Shurcke, M. Preferences for inequality East vs. West, Innocenti Working Paper No. 89, UNICEF Innocenti research Centre, Florence, 2001.

    Google Scholar 

  50. Stern, N.: Welfare weights and the elasticity of the marginal valuation of income, In: M. Artis and R. Nobay (eds.), Studies in Modern Economic Analysis, Basil Blackwell Publishers, Oxford, 1977.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Economics, University of Rome Tor Vergata, Italy

    Vincenzo Atella

  2. Department of Applied Economics, University of Minnesota, USA

    Jay Coggins

  3. Department of Economics, University of Verona, Italy

    Federico Perali

Authors
  1. Vincenzo Atella
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Jay Coggins
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Federico Perali
    View author publications

    You can also search for this author in PubMed Google Scholar

Rights and permissions

Reprints and permissions

About this article

Cite this article

Atella, V., Coggins, J. & Perali, F. Aversion to inequality in Italy and its determinants. J Econ Inequal 2, 117–144 (2005). https://doi.org/10.1007/s10888-005-4386-z

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10888-005-4386-z

Key words

Search

Navigation