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Are People Inequality Averse, and Do They Prefer Redistribution by the State? Evidence from German Longitudinal Data on Life Satisfaction ; A Revised Version

Discussion Papers 407, 23 S.

Johannes Schwarze, Marco Härpfer

2004. Mrz.

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We link life-satisfaction data to inequality of the pre- and post-government income distribution at the regional level, to estimate the degree of inequality aversion. Three different inequality measures are used. In addition, we investigate whether a reduction in inequality by the state increases individual well-being. We find only weak evidence that Germans are inequality averse. Inequality reduction by the state does not increase well being. On the contrary, inequality reduction imposes an excess burden on middle-income earners. The paper uses data from the German Socio-economic Panel Study (GSOEP) from 1985 to 1998.

JEL-Classification: C23;D31;D63;I31
Keywords: Inequality aversion; Redistribution; Life satisfaction; Panel data
Frei zugängliche Version: (econstor)