Reference

Miriam Beblo, Denis Beninger, François Cochard, Hélène Couprie, and Astrid Hopfensitz, Equality-Efficiency Trade-off within French and German Couples – A Comparative Experimental Study, TSE Working Paper, n. 12-374, November 2012.

Abstract

We present the results of an experiment measuring social preferences within couples in a context where intra-household pay-off inequality can be reduced at the cost of diminishing household income. We measure social norms regarding this efficiency-equality trade-off and implement a cross-country comparison between France and Germany. In particular, we show that German households are more inequality averse and are thus less efficient than French households. A decomposition of this difference reveals that approximately 40% is driven by diverging sample compositions in the two countries, while 60% of the initial French/German difference remains unexplained. Beliefs differ significantly from observed behavior in both countries. Efficient choices are overestimated in the German sample and underestimated in the French.

Keywords

Intra-household allocation; Inequality aversion; Pareto efficiency; social norms

JEL codes

  • C71: Cooperative Games
  • C91: Laboratory, Individual Behavior
  • C92: Laboratory, Group Behavior
  • D13: Household Production and Intrahousehold Allocation

Miriam Beblo, Denis Beninger, François Cochard, Hélène Couprie, and Astrid Hopfensitz, Efficiency-Equality Trade-off within French and German Couples – A Comparative Experimental Study, Annales d'Économie et de Statistique, Paris: Institut national de la statistique et des études économiques, n. 117-118, June 2015, pp. 233–252.