Willingness to compensate for unequal circumstances

We use an experimental survey design, which is an adaptation of Almas, Cappelen y Tungodden (2020) to understand the role of circumstances in the willingness to compensate for income inequalities. The experiment will be carried on three samples. First, via an institutional email to students from Universidad de la República (the main university in Uruguay). Students from Economics, Business Administration, Accounting, Social Sciences, and Engineering will be invited. The email with the invitation to participate in the study and the link to the survey is sent to students enrolled in one of the mandatory courses in the first year of the university . In addition, we invite workers from the Universidad de la Republica (Teaching and non-teaching staff). The email with the invitation to participate in the study and the link to the survey is sent to workers using the email addresses available in the University’s administrative records. Additionally, the survey will be disseminated through the usual communication channels the University uses with its staff. In both cases, two reminders will be sent by email. A third sample of non-university-educated individuals aged 25-50 years from Uruguay will be invited through social networks.
Participation is voluntary but as an incentive for participating in the survey, participants will be entered into a drawing to win money to be used in a mall. The study is done with an online self-administered survey and the interventions (information regarding circumstances and effort of beneficiaries to look for a job) are embedded in the online survey.

2024-06-24

2024-12-31

A measure of the willingness to compensate for unequal circumstances.

The allocation of the U$S 500 between the two beneficiaries who face different circumstances measures individuals’ willingness to compensate. We expect to use at least four measures: (1) a dummy variable that indicates if more money is allocated to the disadvantaged person; (2) the value of the difference in money allocated to the different beneficiaries; (3) a dummy variable that indicates if the allocation compensates for the initial gap between beneficiaries. (4) the value of the difference in the final distribution of income between both beneficiaries.
The study will test the following hypotheses: (H1) The transfer amount is greater for the beneficiary facing an unfavorable circumstance. (H2) The transfer amount varies between circumstances.
In addition, we will study if the transfer amount is lower or higher for the treatment with impact on the effort group compared with the treatment without impact on effort group. This will allow us to assess if individuals compensate more, or less, when they know that the circumstance also affected the level of effort that the beneficiary put on looking for a job. We do not have an a priori hypothesis about the sign of this relationship. This allows to test the following hypothesis (H3): Under same circumstances, compensation varies when unfavorable conditions influence beneficiaries' effort decisions, compared to the compensation when the effort is not mentioned.

As secondary outcomes we will measure:
The probability of changing the allocation after a confirmation question.
The primary outcomes mentioned before but when the beneficiaries face a different income gap (100 instead of 200 in the original scenario).
The primary outcomes mentioned before but when they can also allocate money to other public programs.
The acceptance to fund the transfer by a 5% income tax depending on the circumstance.
The acceptance to fund the transfer by a 3% income tax depending on the circumstance.
The primary outcomes mentioned before but when they can allocate 300.
A measure of the willingness to compensate for “pure effort”
Additionally, we will analyze heterogeneous effects according to:
- Background characteristics of the respondent
- Social desirability questions
- Gender
- Academic performance (available in academic registry)

After each choice, in each of the 4 scenarios, participants receive information about the distributive result of their allocation considering the initial inequality. They are asked if they agree with this allocation. If they do not agree, they are asked to reallocate. Additionally, each participant answers for one circumstance whether they would change the beneficiary's allocation if the initial inequality changes. Each participant also responds about their preferences for budget allocation of public programs, if they have 300 to distribute, and whether they will give a transfer if they have to pay taxes. Finally, each participant chooses the amount of transfer when the income gap of the beneficiaries is explained solely by differences in effort.

We elaborate a questionnaire to understand the role of circumstances in the willingness to compensate for income inequalities. The questionnaire contains different vignettes where information related to circumstances faced by a potential beneficiary of a cash transfer program vary. We include 4 different circumstances, and all individuals are asked about how to distribute money depending on the circumstance. In addition, we randomly assign a group of participants to have extra information regarding the effort putted by the beneficiary.

We will collect data from six different modules. (1) Consent information; (2) Socioeconomic and demographic characteristics; (3) The compensation experiment (detailed below); (4) Questions on preferences for redistribution, attitudes, and political beliefs (5) Attention check questions and social desirability module; (6) Consent to merge the survey with other sources of information.

Not available

Randomization is done through the software used for the online survey (Survey Solutions). Each individual has the same probability of being assigned to each group.

The unit of randomization are the respondents of the survey.

No

We are not going to cluster the treatment.

We will send the invitation to participate in the experiment to 3500 university students from the Facultad de Ciencias Económicas y de Administración (Economic Sciences and Administration"), 950 from the Facultad de Ciencias Sociales (Faculty of Social Sciences) and 1000 from the Facultad de Ingenieria (Faculty of Engineering). We expect a response rate of 15%, therefore, we expect to have 700 observations from students. In addition, we will send the e- mail invitation to 15000 university workers. We expect a response rate of 7%, therefore, we expect to have 1000 observations from workers. Finally, we expect to reach 1000 participants through social networks. Considering all responses we expect to have 2700 participants.

The information treatment associated with circumstances will be answered by all participants, therefore we will have 2700 responses for each circumstance.
Treatment associated with effort will be randomly assigned with equal probability of assignment to each group. We expect to have 1350 observations in the treatment group.