Working Paper: CEPR ID: DP5227
Authors: Giacomo Corneo; Christina Fong
Abstract: This paper develops a simple theoretical model that can be implemented to estimate the willingness to pay for distributive justice. We derive a formula that allows one to recover the willingness to pay for distributive justice from the estimated coefficients of a probit regression and fiscal data. Using this formula and data from a 1998 Gallup Social Audit, we find that the monetary value of justice in the United States is about one fifth of GDP. We also generalize the model to estimate the value of justice for different types of people (e.g., Republicans, Democrats, urban dwellers, rural dwellers). We find no evidence that the value of justice varies across types of people. This is consistent with the idea that political differences between types are due to differences in the beliefs about the fairness of the market system, rather than differences in the values they place on distributive justice.
Keywords: distributive justice; fairness; governmental redistribution
JEL Codes: D63; H24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| perceiving market outcomes as unfair (f=0) (D43) | support for governmental redistribution (r=1) (H19) |
| perceiving market outcomes as fair (f=1) (D41) | not supporting redistribution (r=0) (D39) |
| perceiving market outcomes as unfair (f=0) (D43) | willingness to pay for justice (w) (D63) |
| willingness to pay for justice (w) (D63) | achieving justice (j=1) (D63) |
| beliefs about market fairness (f) (D46) | perceived justice of income distribution (j) (D63) |