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Monday, November 12, 2012

Class consciousness

 

The Effect of Inequality Frames on Support for Redistributive Tax Policies

Rosalind Chow & Jeff Galak
Psychological Science, forthcoming

"The research we report here provides evidence that the way in which income inequality is described affects support for redistributive tax policies by influencing how individuals explain income inequality. Income inequality can be described in two ways: as the rich making more than the poor, or as the poor making less than the rich...Regression analyses revealed that conservatism was negatively associated with support for redistributive policies among participants who either received no information about income inequality (i.e., participants in the control condition), β = -0.94, t(72) = -5.14, p < .001, or were told that the poor make less than the rich (i.e., participants in the poor-have-less condition), β = -0.37, t(72) = -2.45, p < .05. That is, in both of these conditions, the more conservative participants were, the lower was their support for the redistributive policies. However, among participants who were told that the rich make more than the poor (i.e., participants in the rich-have-more condition), there was no relationship between conservatism and support for the redistributive policies, β = 0.14, t < 1"

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The Rise of the Super-Rich: Power Resources, Taxes, Financial Markets, and the Dynamics of the Top 1 Percent, 1949 to 2008

Thomas Volscho & Nathan Kelly
American Sociological Review, October 2012, Pages 679-699

Abstract:
The income share of the super-rich in the United States has grown rapidly since the early 1980s after a period of postwar stability. What factors drove this change? In this study, we investigate the institutional, policy, and economic shifts that may explain rising income concentration. We use single-equation error correction models to estimate the long- and short-run effects of politics, policy, and economic factors on pretax top income shares between 1949 and 2008. We find that the rise of the super-rich is the result of rightward-shifts in Congress, the decline of labor unions, lower tax rates on high incomes, increased trade openness, and asset bubbles in stock and real estate markets.

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Some Consequences of Having Too Little

Anuj Shah, Sendhil Mullainathan & Eldar Shafir
Science, 2 November 2012, Pages 682-685

Abstract:
Poor individuals often engage in behaviors, such as excessive borrowing, that reinforce the conditions of poverty. Some explanations for these behaviors focus on personality traits of the poor. Others emphasize environmental factors such as housing or financial access. We instead consider how certain behaviors stem simply from having less. We suggest that scarcity changes how people allocate attention: It leads them to engage more deeply in some problems while neglecting others. Across several experiments, we show that scarcity leads to attentional shifts that can help to explain behaviors such as overborrowing. We discuss how this mechanism might also explain other puzzles of poverty.

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Responsiveness in an Era of Inequality: The Case of the U.S. Senate

Thomas Hayes
Political Research Quarterly, forthcoming

Abstract:
To what extent do members of Congress respond unequally to people in different economic situations? How does partisan control of the agenda change the way in which Senators respond to the poor? Using data from the 2004 National Annenberg Election Survey, and multiple roll call votes, I examine Senate responsiveness for the 107th through 111th Congresses. The results show consistent responsiveness toward upper income constituents. Moreover, Republicans are more responsive than Democrats to middle-income constituents in the 109th Congress, and a case study of the 107th Senate reveals that responsiveness toward the wealthy increases once Democrats take control of the chamber.

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What is the True Rate of Social Mobility? Surnames and Social Mobility in England, 1800-2012

Gregory Clark & Neil Cummins
University of California Working Paper, September 2012

Abstract:
Using rare surnames we follow the socio-economic status of initial groups of rich, middling, and poor in England from 1800 until 2012. We measure social status through wealth, education, occupation, membership in political elites, and average age at death. Mobility rates are much lower than conventionally estimated, including for the most recent generations. There is considerable persistence of status, even after 200 years. Surprisingly the arrival of mass publicly funded education, and universal suffrage, does not improve mobility. Finally we show why mobility rates measured in this way provide better estimates of long run, social group, and generalized social mobility than conventional estimates.

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Nations' income inequality predicts ambivalence in stereotype content: How societies mind the gap

Federica Durante et al.
British Journal of Social Psychology, forthcoming

Abstract:
Income inequality undermines societies: The more inequality, the more health problems, social tensions, and the lower social mobility, trust, life expectancy. Given people's tendency to legitimate existing social arrangements, the stereotype content model (SCM) argues that ambivalence - perceiving many groups as either warm or competent, but not both - may help maintain socio-economic disparities. The association between stereotype ambivalence and income inequality in 37 cross-national samples from Europe, the Americas, Oceania, Asia, and Africa investigates how groups' overall warmth-competence, status-competence, and competition-warmth correlations vary across societies, and whether these variations associate with income inequality (Gini index). More unequal societies report more ambivalent stereotypes, whereas more equal ones dislike competitive groups and do not necessarily respect them as competent. Unequal societies may need ambivalence for system stability: Income inequality compensates groups with partially positive social images.

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Do the Swedes really aspire to sense and the Portuguese to status? Cultural activity and income gap in the member states of the European Union

Tomasz Szlendak & Arkadiusz Karwacki
International Sociology, November 2012, Pages 807-826

Abstract:
This article aims at verifying the findings of Wilkinson and Pickett (2009) which point to a strong correlation between the income gap and the escalation of social problems. Wilkinson and Pickett's thesis states that all kinds of social problems are directly connected to the scale of social inequality in a given country. This article tests this concept by analysing the relation between the income gap in a particular country and the cultural activity of its citizens. The study assumes that low cultural activity can be defined as a social problem in modern European knowledge societies that are based on cultural industry. This relation is investigated in 22 European Union countries. The study demonstrates that there is a strong correlation between cultural activity and the scale of social inequality. In egalitarian countries the cultural activity is high, in highly stratified countries it is low.

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Expansion and Inequality of Educational Opportunity: A Comparative Study

Eyal Bar Haim & Yossi Shavit
Research in Social Stratification and Mobility, forthcoming

Abstract:
Educational attendance rates increased dramatically during the twentieth century, especially in the decades following World War II. In most countries for which data are available, inequality of educational opportunity between social strata declined in those decades, but stabilized thereafter. Analyzing ESS (European Social Survey) data for 24 countries and for cohorts born between the 1950s and 1970s, we study whether educational expansion affected change in equality of educational opportunity among social strata. Our results show educational expansion enhanced inequality of opportunity for tertiary education among cohorts born in the 1950s and 1970s and enhanced inequality of opportunity at the secondary level for the cohort of the 1970s. We also tested and refuted Raftery and Hout's (1993) saturation hypothesis that once the affluent strata reached universal attendance at a given level of education, its further expansion would reduce inequality among strata in the odds of its attainment These results corroborate the hypothesis that the privileged strata are better poised the benefit from educational expansion than the sons and daughters of the lower strata. From a policy perspective, we conclude that expansion is not necessarily an effective tool for the reduction of inequality of educational opportunity. Furthermore, the perpetual expansion of education that is pursued in most countries may hinder the reduction of gaps in education.

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More Relatively-Poor People in a Less Absolutely-Poor World

Shaohua Chen & Martin Ravallion
Review of Income and Wealth, forthcoming

Abstract:
Relative deprivation, shame, and social exclusion can matter to the welfare of people everywhere. The paper argues that such social effects on welfare call for a reconsideration of how we assess global poverty. We argue for using a weakly-relative measure as the upper-bound complement to the lower-bound provided by a standard absolute measure. New estimates of poverty are presented. The absolute line is $1.25 a day at 2005 prices, while the relative line rises with the mean, at a gradient of 1:2 above $1.25 a day, consistently with national poverty lines. We find that the incidence of both absolute and weakly-relative poverty in the developing world has been falling since the 1990s, but more slowly for the relative measure. While the number of absolutely poor has fallen, the number of relatively poor has changed little since the 1990s, and is higher in 2008 than 1981.

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Social class disparities in health and education: Reducing inequality by applying a sociocultural self model of behavior

Nicole Stephens, Hazel Rose Markus & Stephanie Fryberg
Psychological Review, October 2012, Pages 723-744

Abstract:
The literature on social class disparities in health and education contains 2 underlying, yet often opposed, models of behavior: the individual model and the structural model. These models refer to largely unacknowledged assumptions about the sources of human behavior that are foundational to research and interventions. Our review and theoretical integration proposes that, in contrast to how the 2 models are typically represented, they are not opposed, but instead they are complementary sets of understandings that inform and extend each other. Further, we elaborate the theoretical rationale and predictions for a third model: the sociocultural self model of behavior. This model incorporates and extends key tenets of the individual and structural models. First, the sociocultural self model conceptualizes individual characteristics (e.g., skills) and structural conditions (e.g., access to resources) as interdependent forces that mutually constitute each other and that are best understood together. Second, the sociocultural self model recognizes that both individual characteristics and structural conditions indirectly influence behavior through the selves that emerge in the situation. These selves are malleable psychological states that are a product of the ongoing mutual constitution of individuals and structures and serve to guide people's behavior by systematically shaping how people construe situations. The theoretical foundation of the sociocultural self model lays the groundwork for a more complete understanding of behavior and provides new tools for developing interventions that will reduce social class disparities in health and education. The model predicts that intervention efforts will be more effective at producing sustained behavior change when (a) current selves are congruent, rather than incongruent, with the desired behavior and (b) individual characteristics and structural conditions provide ongoing support for the selves that are necessary to support the desired behavior.

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Inequality and growth: Evidence from panel cointegration

Dierk Herzer & Sebastian Vollmer
Journal of Economic Inequality, December 2012, Pages 489-503

Abstract:
This paper uses heterogeneous panel cointegration techniques to estimate the long-run effect of income inequality on per-capita income for 46 countries over the period 1970-1995. We find that inequality has a negative long-run effect on income, both for the sample as a whole and for important sub-groups within the sample (developed countries, developing countries, democracies, and non-democracies). The effect is economically important, with a magnitude about half as high as the magnitude of an increase in the investment share.

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Subjective Well-Being: Keeping Up with the Perception of the Joneses

Cahit Guven & Bent Sørensen
Social Indicators Research, December 2012, Pages 439-469

Abstract:
Using data from the US General Social Survey 1972-2004, we study the role of perceptions and status in self-reported happiness. Reference group income negatively relates to own happiness and high perceptions about own relative income, quality of dwelling, and social class relate positively and very significantly to happiness. Perceptions about income and status matter more for females, and for low income, conservative, more social, and less trusting individuals. Dwelling perceptions matter more for males, and for middle income, married, conservative, more social, and less trusting individuals.

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The homeless use Facebook?! Similarities of social network use between college students and homeless young adults

Rosanna Guadagno, Nicole Muscanell & David Pollio
Computers in Human Behavior, January 2013, Pages 86-89

Abstract:
This research compared technology use among homeless young adults with that of college students as a means of understanding technology use among young adults today; people who have grown up with technology. Specifically, social network site (SNS) usage was assessed for two age-matched young adult samples, one drawn from a large introductory psychology subject pool, and a second from homeless young adults who were approached for participation when they entered metropolitan shelters. Overall, technology use was strikingly similar. These results call for a paradigm shift in researchers' understanding of technology use and indicate that contemporary young adults sampled across socio-economic class and varying ethnicities are far more similar than prior research would suggest. These results call into question whether the term "digital divide" is useful for describing group differences in technology use as our results suggest the divide has narrowed considerably.

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Wealth and/or Love: Class and Gender in the Cross-class Romance Films of the Great Depression

Stephen Sharot
Journal of American Studies, forthcoming

Abstract:
A combination of social and cultural changes account for the popularity of, and the narrative permutations of class and gender in, the cross-class romance films of the 1930s. The analysis is based on a sample of eighty-five cross-class romance films released in the 1929-39 period. The films deal with a dilemma evident in the choice of partners: between interests of wealth and social status and the value of romantic, disinterested love, an ideal which had spread throughout the class structure. Gender distinctions are reinforced by narratives in which the wealthy male is redeemed by the poor female so that he can perform the appropriate male gender roles. When the female is wealthy, the poor male insists on her economic dependence on him. Films with gold diggers reached a peak in the early 1930s and provided imaginary solutions to social anxieties about class and gender among both women and men.

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Intergenerational Transmission of Educational Attainment: The Role of Household Assets

Jin Huang
Economics of Education Review, forthcoming

Abstract:
High intergenerational persistence of educational attainment is an indicator of educational inequality and a barrier to equal opportunities in the labor market and beyond. This study uses data from the Panel Study of Income Dynamics to generate a sample of two cohorts of children ('84 and '94 cohorts), and it examines whether intergenerational transmission of educational attainment varies by household economic resources, especially household assets. Results show that, among male children in the '94 cohort, household assets increase the strength of the association between parents' and children's years of schooling. Also, household assets are found to interact with parental education to affect educational attainment, as measured by college completion, among female children in the '94 cohort. Research and policy implications are discussed

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"Feeling" hierarchy: The pathway from subjective social status to achievement

Mesmin Destin et al.
Journal of Adolescence, December 2012, Pages 1571-1579

Abstract:
The current study tested a psychosocial mediation model of the association between subjective social status (SSS) and academic achievement for youth. The sample included 430 high school students from diverse racial/ethnic and socioeconomic backgrounds. Those who perceived themselves to be at higher social status levels had higher GPAs. As predicted by the model, most of the relationship was mediated by emotional distress and study skills and habits. The lower SSS students had more depressive symptoms, which led to less effective studying and lower GPA. The model held across different racial/ethnic groups, was tested against alternative models, and results remained stable controlling for objective socioeconomic status. Implications for identity-based intervention are discussed.

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Working-Class Cast: Images of the Working Class in Advertising, 1950-2010

Erika Paulson & Thomas O'Guinn
ANNALS of the American Academy of Political and Social Science, November 2012, Pages 50-69

Abstract:
The authors investigate brand advertising as an instrument of class politics, used to shape perceptions of and beliefs about social groups, specifically the working class. These images are consistent with the prescriptions of capitalist realism. The authors content-analyze representations of the working class drawn from a random sample of ads from 1950 to 2010. Quantitative results are compared to a variety of secondary data sources, including the General Social Survey and public opinion polling. The authors find that representations of the working class do not closely follow social, political, or economic changes. If anything, increasingly nostalgic images contradict the disappearance of blue-collar jobs. The authors examine the ads in more depth to explain why the content does not align with objective reality, identifying a variety of tableaus commonly used in representations of the working class that are consistent with capitalist realism and myths of the American class structure.

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Empirics of the median voter: Democracy, redistribution and the role of the middle class

Francesco Scervini
Journal of Economic Inequality, December 2012, Pages 529-550

Abstract:
This paper improves the empirical investigation on the effectiveness of the median voter theorem. Using high quality data, it is possible to directly observe individual net cash transfers in several countries and to investigate the effects of taxes and transfers on different social classes and in aggregate. This allows testing of both the "redistribution hypothesis" (more inequality leads to more redistribution in aggregate) and the "median voter hypothesis" (the middle class plays a special role in policy making). Results suggest acceptance of the former and reject on, or at least questioning, of the latter. Not only the gains from redistribution are negligible for the middle class, but also the link between income and redistribution is also lower for it than for any other class of income. Moreover, the strength of the median voter seems to fall over time. Finally, the amount of redistribution targeted to the middle class is lower in more asymmetric societies, a result that contrasts strongly with the median voter theorem.

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What is the True Rate of Social Mobility in Sweden? A Surname Analysis, 1700-2012

Gregory Clark
University of California Working Paper, August 2012

Abstract:
On conventional measures, modern Sweden has rapid social and economic mobility. Analyzing surname distributions among Swedish elites - attorneys, physicians, university students, and academicians - this paper shows that conventional measures greatly overstate social mobility. The Swedish elite of 1700 is still an elite, and is becoming average only slowly. The b measuring status persistence across generations is 0.7-0.8, compared to the 0.25-0.40 found in conventional studies. This illustrates a general feature that conventional studies overstate generalized or long-term social mobility rates. True rates of mobility in Sweden are similar to those of the supposedly more socially immobile economies of the UK and USA. They are little higher than in the pre-industrial era.

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Assessing the Possible Antipoverty Effects of Recent Rises in Age-Specific Minimum Wages in New Zealand

Tim Maloney & Gail Pacheco
Review of Income and Wealth, December 2012, Pages 648-674

Abstract:
Real minimum wages increased by nearly 33 percent for adults and 123 percent for teenagers in New Zealand between 1999 and 2008. Where fewer than 2 percent of workers were being paid a minimum wage at the outset of this sample period, more than 8 percent of adult workers and 60 percent of teenage workers were receiving hourly earnings close to the minimum wage by the end of this period. These policy changes provide a unique opportunity to estimate the effects of the minimum wage on poverty. Although minimum wage workers are more likely to live in the poorest households, they are relatively widely dispersed throughout the income distribution. This is particularly true of teenage minimum wage workers. Furthermore, low-income households often do not contain any working members. We estimate that a 10 percent increase in minimum wages, even without a loss in employment or hours of work, would lower the relative poverty rate by less than one-tenth of a percentage point.

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Who wants to work less? Significance of socio-economic status and work conditions for work commitment among Swedish lottery winners

Anna Hedenus
Acta Sociologica, December 2012, Pages 335-350

Abstract:
Manual workers and workers who experience their jobs as ‘bad' are presumed to have a more instrumental attitude toward work than those with high job satisfaction. This study examines whether demonstrated differences in Swedish lottery winners' work patterns - where blue-collar winners are more apt than white-collar winners to scale back their time spent on paid work - can be explained by a difference in work conditions for these socio-economic groups. Starting from such expectations, this article examines the impact of work conditions on winners' decisions to leave their jobs, take periods of leave, or reduce their working hours. Negative job perceptions accompanying physical strain, poor possibilities for further training, ‘bad' colleagues and lack of influence over one's working hours were found to be central in the decision to spend less time at work. The effect of socio-economic status on the option of working shorter hours, however, was still significant even when controlling for job characteristics.

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Social Sampling Explains Apparent Biases in Judgments of Social Environments

Mirta Galesic, Henrik Olsson & Jörg Rieskamp
Psychological Science, forthcoming

Abstract:
How people assess their social environments plays a central role in how they evaluate their life circumstances. Using a large probabilistic national sample, we investigated how accurately people estimate characteristics of the general population. For most characteristics, people seemed to underestimate the quality of others' lives and showed apparent self-enhancement, but for some characteristics, they seemed to overestimate the quality of others' lives and showed apparent self-depreciation. In addition, people who were worse off appeared to enhance their social position more than those who were better off. We demonstrated that these effects can be explained by a simple social-sampling model. According to the model, people infer how others are doing by sampling from their own immediate social environments. Interplay of these sampling processes and the specific structure of social environments leads to the apparent biases. The model predicts the empirical results better than alternative accounts and highlights the importance of considering environmental structure when studying human cognition.

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Cultural constraints on rising income inequality: A U.S.-Japan comparison

Arthur Sakamoto et al.
Journal of Economic Inequality, December 2012, Pages 565-581

Abstract:
Prior research has identified fundamental cultural and normative concepts - including wa, enryo, giri, and amae - that are typically argued to be integral to Japanese society. We advance this line of research by discussing how these traditional cultural concepts may influence labor market relations and thereby constrain the degree of income inequality in Japan relative to the U.S. Collectivist cultural attitudes are embedded in Japanese work organization, and are naturally inherited social constraints when compared to more unbridled labor market relations of the "New Economy" in the U.S. While studies of rising inequality in the U.S. and Europe consider how governmental policies impinge upon market forces in order to moderate labor market outcomes, our analysis suggests how culture may sometimes directly constrain income inequality without imposing legal regulations or instituting official programs.

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Interim Rank, Risk Taking, and Performance in Dynamic Tournaments

Christos Genakos & Mario Pagliero
Journal of Political Economy, August 2012, Pages 782-813

Abstract:
We empirically study the impact of interim rank on risk taking and performance using data on professionals competing in tournaments for large rewards. As we observe both the intended action and the performance of each participant, we can measure risk taking and performance separately. We present two key findings. First, risk taking exhibits an inverted-U relationship with interim rank. Revealing information on relative performance induces individuals trailing just behind the interim leaders to take greater risks. Second, competitors systematically underperform when ranked closer to the top, despite higher incentives to perform well. Disclosing information on relative ranking hinders interim leaders.

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The Distributional Burden of Instant Lottery Ticket Expenditures: An Analysis by Price Point

Thomas Garrett
Public Finance Review, November 2012, Pages 767-788

Abstract:
This article examines the distributional burden of different price-point instant lottery games. Theoretical reasons exist for expecting higher-priced instant lottery games to be less regressive than lower-priced instant games. Using county-level data on sales by price point for six states, the empirical results show that higher-priced instant games are less regressive than lower-priced games. In addition, regressivity is rejected in favor of proportionality for some instant lottery games. The analysis also reveals that counties having a higher-percentage of low-income households have higher sales of lower-priced instant games, but differences in the distribution of household income have no significant impact on higher-priced instant sales. Taken together, the findings suggest that large differences in the distributional burden of individual instant games are masked if aggregated instant-lottery sales data are used.

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Understanding Rising Income Inequality in Germany, 1999/2000-2005/2006

Martin Biewen & Andos Juhasz
Review of Income and Wealth, December 2012, Pages 622-647

Abstract:
We examine the factors behind rising income inequality in Europe's most populous economy. From 1999/2000 to 2005/2006, Germany experienced an unprecedented rise in net equivalized income inequality and poverty. At the same time, unemployment rose to record levels, part-time and marginal part-time work grew, and there was evidence for a widening distribution of labor incomes. Other factors that possibly contributed to the rise in income inequality were changes in the tax and transfer system, changes in the household structure (in particular the rising share of single parent households), and changes in other socio-economic characteristics (e.g., age or education). We address the question of which factors were the main drivers of the observed inequality increase. Our results suggest that the largest part of the increase was due to increasing inequality in labor incomes, but that changes in employment outcomes and changes in the tax system also contributed considerable shares. By contrast, changes in household structures and household characteristics, as well as changes in the transfer system only seem to have played a minor role.

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Infrastructure and Inequality

Santanu Chatterjee & Stephen Turnovsky
European Economic Review, November 2012, Pages 1730-1745

Abstract:
We develop a model in which public capital is both an engine of growth and a determinant of the distributions of wealth, income, and welfare. Government investment increases wealth inequality over time, regardless of its financing. The time path of income inequality is, however, highly sensitive to financing policies, and is often characterized by sharp intertemporal tradeoffs, with income inequality declining in the short run but increasing in the long run. Public investment generates a positive correlation between growth and income inequality along the transition path, but their short-run and long-run relationship depends critically on (i) how externalities impinge on allocation decisions, (ii) financing policies, and (iii) the time period of consideration. Finally, these policies also generate sharp trade-offs between average welfare and its distribution, with government investment improving average welfare, but also increasing its dispersion. Our results are obtained numerically but extensive sensitivity analysis confirms their robustness across key parameter values.

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Income redistribution going awry: The reversal power of the concern for relative deprivation

Gerhard Sorger & Oded Stark
Journal of Economic Behavior & Organization, forthcoming

Abstract:
We demonstrate that a rank-preserving transfer from a richer individual to a poorer individual can exacerbate income inequality (when inequality is measured by the Gini coefficient). This happens not only when individuals' preferences depend negatively on work time (effort) but also on low relative income. It is rigorously shown that the set of preference profiles that gives rise to this perverse effect of a transfer on inequality is a non-empty open subset of all preference profiles. A robust example illustrates this result.

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Incentives and timing in relative performance judgments. A field experiment

Michal Krawczyk
Journal of Economic Psychology, December 2012, Pages 1240-1246

Abstract:
Several studies have identified the "better than average" effect - the tendency of most people to think they are better than most other people on most dimensions. The effect would have profound consequences, such as over-trading in financial markets. The findings are predominantly based on non-incentivized, non-verifiable self-reports. The current study looks at the impact of incentives to judge one's abilities accurately in a framed field experiment. Nearly 550 students were asked to predict whether they would do better or worse than average in an exam. The most important findings are that subjects tend to show more confidence when incentivized and when asked before the exam (especially long before the exam) rather than afterwards. The first effect shows up particularly in females.

By KEVIN LEWIS | 09:00:00 AM