Personality and dislike for inequality: Typifying inequality aversion with respect to locus of control

• Localización: XXI Encuentro Economía Pública, 2014, pág. 56
• Idioma: inglés
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  • In this paper we find an individual non-cognitive characteristic that generates heterogeneity on individuals� taste for equality. This is individuals� locus of control (LOC), a personality measure that defines individuals as externals or internals depending on individuals� perception about the role of external (e.g., luck and others) or internal (e.g., effort and own decisions) forces driving their lives. The empirical analysis shows that external individuals are more inequality averse than internal individuals. This relates to the idea that individuals� degree of tolerance towards inequality depends on the importance they assign to own effort or luck to determine individuals� outcomes. Even though policy making cannot affect individuals� personality and despite personality seems to be fairly time persistent, understanding the relationship between LOC and inequality aversion will help us assess the importance of fairness feelings on shaping preferences for equality. The empirical analysis uses the German SOEP, a large representative panel data set for Germany.