Fairness Across the World

This is a pre-analysis plan for a unique study of the role of fairness and efficiency considerations in justifying inequalities across the world.1 The classical approach in economics has been to focus on the trade-off between equality and efficiency, where the basic idea is that there is a cost of redistribution and inequality acceptance therefore depends on the relative importance assigned to efficiency versus equality. A growing literature in political economy and behavioral economics, however, has shown that not only efficiency considerations seem to matter for inequality acceptance; fairness considerations may also be of great importance. For example, inequalities reflecting differences in effort appear to be more acceptable than inequalities reflecting differences in luck (Konow, 2000; Cappelen, Drange Hole, Sørensen, and Tungodden, 2007; Almaas, Cappelen, Sørensen, and Tungodden, 2010).

This project provides a novel data set on the nature of inequality acceptance. It provides unique descriptive data on inequality acceptance across the world; comprehensive data on people’s beliefs about the sources of inequality and cost of redistribution; novel data on how unfair people perceive the income distribution to be and their attitude to redistribution; causal evidence on the importance of the source of inequality and efficiency considerations for inequality acceptance; rich individual data that will support a number of studies on how inequality acceptance is associated with socioeconomic status, religion, gender, age, and other relevant background variables.