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The Measurement of Changes in Distributional Preferences

Cui, Chi ; Dai, Ming ; Alevy, Jonathan

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Abstract

This study explores the way in which social information about giving impacts the stability of distributional preferences. We designed a two-stage treatment which varied the information participants received about the maximum amounts given to recipients. Information on maximum giving can significantly increase giving share compared to the control group, especially when the relative price of giving is low. However, with a rise in the relative price,the giving decreases significantly. Applying measures of consistency with the Generalized Axiom of Revealed Preference (GARP) and non-linear Tobit estimates of preferences, we observe changes in distributional preferences indicating that more fairness and efficiency are considered in distributions when social information is provided. Type changes in distributional preferences at an individual level provide evidence that there is one substitution relationship with context to fairness-selfishness and efficiency-equality tradeoffs. People’s preferences can change due to environmental factors, which are less equalityfocused and more efficiency-oriented. It provides evidence for heterogeneity in preference stability by studying distribution stability causal effect.

Document type: Working paper
Series Name: AWI Discussion Paper Series
Volume: 0759
Place of Publication: Heidelberg
Date Deposited: 21 Jan 2025 13:57
Date: 2025
Number of Pages: 45
Faculties / Institutes: The Faculty of Economics and Social Studies > Alfred-Weber-Institut for Economics
DDC-classification: 330 Economics
Uncontrolled Keywords: Distributional Preferences; GARP; Dictator Game; Maximum Information
Series: Discussion Paper Series / University of Heidelberg, Department of Economics
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