Wealthy individuals often voluntarily provide public goods that the poor also consume. Such philanthropy is perceived as legitimizing one’s wealth. Governments routinely exempt the rich from taxation on grounds of their charitable expenditure. We examine the normative logic of this exemption....

The standard theory of anti - poverty targeting assumes individual incomes cannot be observed, but statistical properties of income distribution in broadly defined groups are known. "Indicator targeting" rules are then derived for the forms of transfers conditioned on group membership of...

Wealthy individuals often voluntarily provide public goods that the poor also consume. Such philanthropy is perceived as legitimizing one’s wealth. Governments routinely exempt the rich from taxation on grounds of their charitable expenditure. We examine the normative logic of this exemption....

We examine theoretically and empirically social interactions in labor markets and how policy prescriptions can change dramatically when there are social interactions present.

We investigate how vertical unity within a community interacts with horizontal class divisions of an unequal income distribution. Community is conceptualized in terms of a public good to which all those in the community have equal access, but from which outsiders are excluded. We formulate the...

We present new evidence on the influence of income inequality on generalized trust. Using individual panel data from Swedish counties together with an instrumental variable strategy, we find that differences in disposable income, and especially differences among people in the bottom half of the...

This paper reviews the literature on economic inequality and trust. Cross-country studies, within-country studies, and experiments all suggest that economic inequality exerts a negative influence on trust. Four mechanisms are proposed to explain the negative relationship: social ties (or...

This paper examines subjective social status to test whether individual comparisons are driven by income and wealth, or social and cultural capital as defined by Bourdieu. The empirical analysis uses a cross-sectional data set of 18 European countries and a mixed model with an MCMC estimation...

This paper examines subjective social status to test whether individual comparisons are driven by income and wealth, or social and cultural capital as defined by Bourdieu. The empirical analysis uses a cross-sectional data set of 18 European countries and a mixed model with an MCMC estimation...

The two sides of envy, destructive and constructive, give rise to qualitatively different equilibria, depending on the economic, institutional, and cultural environment. If investment opportunities are scarce, inequality is high, property rights are poorly protected, and social comparisons are...