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Title:Evaluating real world income distributions behind the veil of ignorance: How risk averse do you have to be to prefer Europe over the US? PDF Logo
Authors:Weichenrieder, Alfons
Zafar, Tasneem
Issue Date:2011
Series/Report no.:CESifo working paper: Public Finance 3632
Abstract:The paper uses a veil of ignorance approach and income distribution data of developed countries to arrive at inequality corrected income rankings. While a risk neutral individual (based on year 2000 data) would have preferred to be born into the US rather than any European country in our sample except Luxembourg, a coefficient of relative risk aversion of 2 suffices to make several European countries look preferable. The paper also sheds light on the risk corrected average income on a gender basis and scans for times of diminished expectations, i.e. periods where the expected utility of being born into a country has reduced over time.
Subjects:income distribution
veil of ignorance
cross country comparison
JEL:D31
H23
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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