Measures of inequality aversion are elicited using hypothetical decision tasks.
The tasks require an assessment of social projects in the presence of environmental
inequalities across space and time. We also test the effect of different environmental
domains (air pollution, recreational forest and soil fertility) and contextual ...
Measures of inequality aversion are elicited using hypothetical decision tasks.
The tasks require an assessment of social projects in the presence of environmental
inequalities across space and time. We also test the effect of different environmental
domains (air pollution, recreational forest and soil fertility) and contextual framings
(gain/loss, within/between regions and present-future/past-present inter-temporal
trade-offs). Estimated mean inequality aversion is higher in the intra-temporal framing: an elasticity of 2.9, than in the inter-temporal framing with either negative (2.0)
or positive (1.4) growth in environmental quality. Differences across environmental
domains exist but are less pronounced. Similar results hold for pure time preference. Losses are associated with a lower pure rate of time preference but higher
inequality aversion compared to gains. The results indicate how domain-specific
‘dual’ discount rates or rather changing relative shadow prices for the environment
might be calibrated. Yet, seen as an exercise in empirical social choice, the context dependent results reject the classical Utilitarian formulation of a single Ramsey
Rule.