Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/195561 
Year of Publication: 
2017
Citation: 
[Journal:] Quantitative Economics [ISSN:] 1759-7331 [Volume:] 8 [Issue:] 3 [Publisher:] The Econometric Society [Place:] New Haven, CT [Year:] 2017 [Pages:] 1037-1082
Publisher: 
The Econometric Society, New Haven, CT
Abstract: 
We propose a method to quantify other-regarding preferences in group decisions. Our method is based on revealed preference theory. It measures willingness-to- pay for others' consumption and willingness-to-pay for equality in consumption by evaluating consumption externalities in monetary terms. We introduce an al- truism parameter and an inequality aversion parameter. Each parameter defines a continuum of models characterized by varying degrees of externalities. We study the empirical performance of our method through a simulation analysis, in which we also investigate the impact of measurement error and increased sample size. Finally, we use our method to analyze decisions made by dyads of children in an experimental setting. We find that children's decisions are particularly characterized by varying levels of altruism. We relate this heterogeneity across children to age, gender, and the degree of friendship in dyads.
Subjects: 
Consumption externalities
altruism
inequality aversion
revealed preferences
children's consumption
JEL: 
D11
D12
C14
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article

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