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Income Inequality, Reciprocity and Public Good Provision: An Experimental Analysis Begging the Question: Permanent Income and Social Mobility

20 September 2012
Publication Type: Working Paper
JEL Code: D03, D63

This paper analyses the impact of income inequality on public good provision in an experimental setting. A sample of secondary school students were recruited to participate in a simple linear public goods game where income heterogeneity was introduced by providing participants with unequal token endowments. The results show that endowment heterogeneity does not have any significant impact on contributions to the public good, and that consistent with models of reciprocity, low and high endowment players contribute the same fraction of their endowment to the public pool. Moreover, individuals appear to adjust their contributions in order to maintain a fair share rule.

Working Paper 077
1 May 2008
Journal: 2007, South African Journal of Economics, 75(3), 508-520
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