Stated Preferences for Inequality Aversion and Rank-Status

A number of social preference models have been proposed to account for the effect of social context on economic decision-making. To better differentiate these preferences at the individual level, we developed an adaptive binary-choice procedure based upon the Parameter Estimation by Sequential Testing (PEST) algorithm to estimate indifference points for scenarios of equality and inequality. We combined elicited indifference points in scenarios where the inequalities posed were advantageous and those where inequalities were disadvantageous to represent underlying motives of preference in two dimensional choice space (N = 83). We also explored the relationship between preference and leisure (vacation time) versus non-leisure (low income, high income, attractiveness, intelligence, and praise) attributes. We find considerable heterogeneity in preferences for leisure and non-leisure characteristics. Overall, a consistent plurality of participants fall into space characterised as “equality seeking”, followed by “status avoiding” and “relative advantage” preference archetypes. Self-interest preferences were strongest in low income and vacation attributes. Concern with advantageous inequality was correlated across domains, as was concern with disadvantageous inequality. The results highlight both discrete and continuous individual differences in social preference.