Evaluating real world income distributions behind the veil of ignorance: How risk averse do you have to be to prefer Europe over the US?
The paper uses a veil of ignorance approach and income distribution data of developed countries to arrive at inequality corrected income rankings. While a risk neutral individual (based on year 2000 data) would have preferred to be born into the US rather than any European country in our sample except Luxembourg, a coefficient of relative risk aversion of 2 suffices to make several European countries look preferable. The paper also sheds light on the risk corrected average income on a gender basis and scans for times of diminished expectations, i.e. periods where the expected utility of being born into a country has reduced over time.
Year of publication: |
2011
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Authors: | Weichenrieder, Alfons J. ; Zafar, Tasneem |
Publisher: |
Luxembourg : Luxembourg Income Study (LIS) |
Subject: | Einkommensverteilung | Verfassungsökonomik | Präferenztheorie | Risikoaversion | Vergleich | USA | Europa | income distribution | veil of ignorance | cross country comparison |
Saved in:
freely available
Series: | LIS Working Paper Series ; 572 |
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Type of publication: | Book / Working Paper |
Type of publication (narrower categories): | Working Paper |
Language: | English |
Other identifiers: | 682197645 [GVK] hdl:10419/95560 [Handle] |
Classification: | D31 - Personal Income, Wealth and Their Distributions ; H23 - Externalities; Redistributive Effects ; Environmental Taxes and Subsidies |
Source: |
Persistent link: https://www.econbiz.de/10010335546