Measuring attitudes towards inequality

Individuals' attitudes to inequality aversion are measured using survey dat a, based on the leaky-bucket experiment, for several groups of students in Australia and Israel. Three forms of social welfare function are estimated. It is found that measures of inequality aversion can be obtained with some precision and that these estimates are substantially lower than the values typically used by those measuring inequality and examining optimal tax str uctures. Furthermore, a welfare function based on the Gini inequality measu re is generally found to give a better fit than forms based on constant rel ative or constant absolute inequality aversion.