A pilot test of using the veil of ignorance approach to estimate a social welfare function for income

Abstract

The veil of ignorance approach is tested as a basis for empirically determining the shape of the social welfare function for income. An experiment is carried out where the participants choose between different societies that differ with respect to per capita income and the distribution of income. The answers are analysed using logistic regression analysis. According to the results the respondents are willing to give up Swedish Crowns (SEK) 1 in the group with more income to gain SEK 0.35 in the group with less income, but this trade-off is independent of the size of the difference in income between the groups.