Social Preferences Regarding Inequalities in Income and Inherited Wealth

Last registered on November 01, 2021

Pre-Trial

Trial Information

General Information

Title
Social Preferences Regarding Inequalities in Income and Inherited Wealth
RCT ID
AEARCTR-0008171
Initial registration date
October 28, 2021
Last updated
November 01, 2021, 10:48 AM EDT

Locations

Region

Primary Investigator

Affiliation
University of Haifa

Other Primary Investigator(s)

PI Affiliation
University of Haifa
PI Affiliation
Friedrich-Alexander-Universität Erlangen-Nürnberg

Additional Trial Information

Status
In development
Start date
2021-11-01
End date
2022-01-15
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
People's attitudes regarding the fairness of income inequality may differ depending on the source of inequality. The fairness views with respect to inequality generated by luck or by merit have been recently studied in different countries. In this study we would like to extend the discussion and examine views regarding inherited inequality in addition to the views regarding inequality generated by luck and merit.
We conduct an incentivized online experiment consisting of a representative sample of the adult Israeli population. The experiment is based on the impartial spectator methodology (as in Almas et al., 2020) in which spectators make redistribution choices in situations where inequality is due to luck, effort or inheritance.
External Link(s)

Registration Citation

Citation
Cohen, Rachelle, Amnon Maltz and Yuval Ofek-Shanny. 2021. "Social Preferences Regarding Inequalities in Income and Inherited Wealth." AEA RCT Registry. November 01. https://doi.org/10.1257/rct.8171-1.0
Experimental Details

Interventions

Intervention(s)
Intervention Start Date
2021-11-01
Intervention End Date
2022-01-15

Primary Outcomes

Primary Outcomes (end points)
Redistribution choices of impartial spectators
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Distribution of types of fairness views
Secondary Outcomes (explanation)
See analysis plan.

Experimental Design

Experimental Design
Following the impartial spectator design in Almas et al. (2020), we will conduct an online experiment in order to capture the social preferences in the Israeli population. The subjects will be a representative sample of the adult Israeli population. All subjects will be registered panelists of a survey company and they will receive a participation fee. Some subjects will receive an additional payment according to their performance, luck and decisions made by other subjects in the study.

The study consists of three treatments: luck, merit and inheritance. Using the impartial spectator design used in Almas et al. (2020), spectators will be asked to redistribute payments between two other subjects in the experiment who are randomly paired together. In each pair one subject will have the total amount of earnings and the other will have nothing. The spectator will decide freely how to redistribute the money in the pair. The difference between treatments lies in the source of the initial inequality. In the first treatment the source will be luck. In the second treatment, it will be based on merit, i.e., relative performance in a task. Finally, in the inheritance treatment, it will be based on a decision of another subject who earned the money and chose to whom to transfer his income based on some information regarding the pair's hobbies.

References:

Almås, I., Cappelen, A.W., & Tungodden, B. (2020). Cutthroat capitalism versus cuddly
socialism: Are Americans more meritocratic and efficiency-seeking than
Scandinavians? Journal of Political Economy, 128 (5), 1753-1788.
Experimental Design Details
The luck and merit treatments include two stages and are quite similar to each other (both are based on Almas et al. 2020). The only difference between them is the source of inequality: In the merit treatment it is based on performance in a task and in the luck treatment it is random (each subject in a pair has the same probability to get the money for performing a task). The inheritance treatment involves another stage. The details are given below.

Luck Treatment

Stage 1: Subjects (called "workers") perform a task. Upon completion, they are randomly matched into pairs. In each pair, one worker is randomly chosen (with probability 0.5) to receive 12 ILS for completing the task and the other receives no reward.
Stage 2: Additional Subjects (called "spectators") are randomly assigned to the pairs. Each spectator decides how to redistribute the earnings in the pair (the options are 12-0, 10-2, 8-4 and so on).

Merit Treatment

Stage 1: As the luck treatment but the worker who receives the monetary amount for the task is the one who performed better in the task.
Stage 2: As in the Luck treatment.

Note:
Workers will perform two tasks. The first will be the basis for the luck treatment and will not be graded. The second will be graded and will be the basis of the merit treatment. Pairs will be matched randomly and separately for each treatment.

Inheritance treatment

Stage 1: Subjects (called "participants") will be asked to list their 5 most favorable hobbies from a list of hobbies. Upon completion they will be randomly matched into pairs.
Stage 2: Subjects (called "earners") will perform a task and earn 12 ILS for it. They will then be given the list of hobbies of a randomly chosen pair from stage 1 and, based on the list of hobbies of each participant in the pair, will be asked to decide to whom to transfer their earnings (they will be told upfront that they cannot keep their earnings but may choose to whom it will be transferred).
Stage 3: Spectators will be given the opportunity to redistribute the money in the pair.

Notes:
1. All the information regarding the different stages and the procedure for payment is made clear in the instructions.
2. Spectators will redistribute money only for one pair (the analysis is between subjects).
Randomization Method
All randomizations will be made using a computer program.
Randomization Unit
individual
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
No clusters planned
Sample size: planned number of observations
The number of observations that will be relevant to the data analysis is 270 (90 spectators in each treatment).
Sample size (or number of clusters) by treatment arms
We have 4 types of subjects (the names are described in the experimental design:

“Participants” – 180
“Earners” – 90
“Workers” – 180 (luck treatment) + 180 (merit treatment) = 360
“Spectators” – 270
Total – 900 participants
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
The power calculation is attached in the Docs & Materials section.
Supporting Documents and Materials

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IRB

Institutional Review Boards (IRBs)

IRB Name
University of Haifa, Faculty of Social Sciences
IRB Approval Date
2021-09-14
IRB Approval Number
374/21
Analysis Plan

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Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials