Last-place aversion: Evidence and redistributive implications

Ilyana Kuziemko, Ryan W. Buell, Taly Reich, Michael I. Norton

Research output: Contribution to journalArticle

82 Scopus citations

Abstract

We present evidence from laboratory experiments showing that individuals are "last-place averse." Participants choose gambles with the potential to move them out of last place that they reject when randomly placed in other parts of the distribution. In modified dictator games, participants randomly placed in second-to-last place are the most likely to give money to the person one rank above them instead of the person one rank below. Last-place aversion suggests that low-income individuals might oppose redistribution because it could differentially help the group just beneath them. Using survey data, we show that individuals making just above the minimum wage are the most likely to oppose its increase. Similarly, in the General Social Survey, those above poverty but below median income support redistribution significantly less than their background characteristics would predict.

Original languageEnglish (US)
Article numberqjt035
Pages (from-to)105-149
Number of pages45
JournalQuarterly Journal of Economics
Volume129
Issue number1
DOIs
StatePublished - Feb 2014

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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