“Last-Place Aversion”: Evidence and Redistributive Implications

By I. Kuziemko, Ryan W. Buell, Taly Reich, Michael I. Norton. 2014

328 citations recorded by the source corpus.

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. JEL Codes: H23, D31, C91. Copyright 2014, Oxford University Press.

Subfields: Demography, General Decision Sciences, Safety Research

View Paper: https://www.semanticscholar.org/paper/4fc9ae23046755a4d10cb605083273ffcd742dcd

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Citations in the corpus

The Two Facets of Social Policy Preferences (2014, background): “Recent research by political economists on inequity aversion (see Lu, Scheve, and Slaughter 2012 drawing from Fehrs and Schmidt 1999) and last-place aversion (Buell et al. 2011) provide interesting starting points.”
The Altruistic Rich? Inequality and Other-Regarding Preferences for Redistribution (2017, background): “, Lupu and Pontusson 2011; Shayo 2009), which highlight the limits of other-regardingness, or models such as “last-place aversion” preferences (Kuziemko et al. 2014), which make predictions about the effects of inequality on only a smaller subset of the population.”
Understanding Tax Policy: How Do People Reason? (2020, unknown): “Related Literature: The baseline framework in this paper is inspired by the core optimal tax models, as proposed by Saez (2001) (for good surveys of the literature, see Mankiw, Weinzierl, and Yagan (2009), Saez, Slemrod, and Giertz (2012), and Piketty and Saez (2013)) as well as by the literature on”
The Morale Effects of Pay Inequality (2016, unknown): “Related laboratory experiments have examined the effects of rank (Brown et al. 2008, Clark et al. 2010, Kuziemko et al. 2011).”
How Financial Constraints Influence Consumer Behavior: An Integrative Framework (2018, background): “However, participants who earned the second-to-lowest incomes were less likely than other groups to redistribute the money to others who were worse off than they were, suggesting that they were concerned about the possibility of moving into last place (Kuziemko et al., 2014).”
A Big Fish in a Small Pond: Ability Rank and Human Capital Investment (2017, background): “The absolute rank would be more important if one were interested in particular rank positions, e.g., the first place or the last place (e.g., Kuziemko et al. 2014; Gill et al. 2015), whereas we are primarily interested in the average effect of ordinal rank. the middle of the global distribution and…”
The downside of good peers: How classroom composition differentially affects men's and women's STEM persistence (2017, result): “Consistent with this idea, Kuziemko et al. (2014) show that men are more likely to gamble to avoid low rank whereas women 26 accept it.25 There are many reasons to believe that women might be turned off by the climate in STEM while men are not.”
Rankings and Risk-Taking in the Finance Industry (2018, unknown): “This means that, purely based on wealth levels, the player with the worst rank (rank 6) would be the least likely to choose the lottery (Kuziemko et al., 2014).”
Attitudes to Income Inequality: Experimental and Survey Evidence (2014, background): “The experimental and survey results in Kuziemko et al. (2014) underline the importance of the aversion to being last in the distribution.”
Intergenerational Mobility and Preferences for Redistribution (2018, methodology): “In that sense, our experiment differs from the “informational” treatments in Kuziemko et al. (2015), who provide information on actual inequality in the U.”
The threat of social decline: income inequality and radical right support (2020, background): “On the one hand, this is because when it comes to subjective perceptions of one’s position in a hierarchy, people have a ‘last place aversion’ (Kuziemko et al. 2014).”
Rank And Response: A Field Experiment On Peer Information And Water Use Behavior (2017, methodology): “Meanwhile, we might expect low-performing individuals to change their behavior to avoid being last, particularly if they are close to the margin, due to last place aversion (Kuziemko et al., 2014).”