CORE Brown Bag Seminar

Francesco Capozza; Erasmus University Rotterdam & Tinbergen Institute

Who Should Get the Money? Estimating Welfare Weights in the US

Abstract:

Welfare weights measure the value of providing an additional dollar of consump- tion to individuals in society. We identify the welfare weights assigned by the general population of the U.S. to individuals in society using a large-scale real stakes experi- ment. In our experiment, participants in the role of “Social Architects" assign welfare weights to seven real “Recipients" with disposable incomes that span the income distribution of the U.S. The welfare weights obtained from our experiment are suffi- cient statistics that can incorporate various ideals and can be directly used to evaluate reforms. We find that the welfare weights of the general population of the U.S. (i) exhibit, on average, a low to moderate degree of progressivity, (ii) predict their policy preferences, (iii) are slightly more progressive than the welfare weights implied by the existing policies in the U.S., and (iv) are much less progressive than the welfare weights commonly used in the literature.