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

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
Related Journal

2007, South African Journal of Economics, 75(3), 508-520
20 September 2012
Publication Type: Working Paper
Economic Theme: Human Capital Policy
JEL Code: D03, D63