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Journal Article

Efficiency-Equality Trade-off within French and German Couples: A Comparative Experimental Study

Miriam Beblo, Denis Beninger, François Cochard, Hélène Couprie and Astrid Hopfensitz
Annals of Economics and Statistics
No. 117/118, SPECIAL ISSUE ON THE ECONOMICS OF GENDER (June 2015), pp. 233-252
Published by: GENES on behalf of ADRES
DOI: 10.15609/annaeconstat2009.117-118.233
Stable URL: http://www.jstor.org/stable/10.15609/annaeconstat2009.117-118.233
Page Count: 20
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Efficiency-Equality Trade-off within French and German Couples: A Comparative Experimental Study
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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 by reported beliefs about the behavior of peers, and we implement a cross-country comparison between France and Germany. In particular, we show that German households are more income-inequality averse and thus less income-maximizing than French households. Decomposition reveals that diverging sample compositions in the two countries drive less than half of the difference, while over half of the initial French/German difference remains unexplained. Beliefs differ significantly from observed behavior in both countries. Income-maximizing choices are overestimated in the German sample and underestimated in the French. JEL: C71, C91, C92, D13 / KEY WORDS: Intra-Household Allocation, Inequality Aversion, Efficiency, Social Norms.

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