cross-cultural equity evaluations: a questionnaire-experimental approach

*Corresponding author. Tel.: #49-541/969-2725; fax: #49-541/969-2705.E-mail address: [email protected] (W. Gaertner).

European Economic Review 45 (2001) 953}963

Cross-cultural equity evaluations:A questionnaire-experimental approach

Wulf Gaertner��*, Jochen Jungeilges�, Reinhard Neck�

�Department of Economics, University of Osnabru( ck, D-49069 OsnabruK ck, Germany�Department of Economics, University of Bielefeld, Bielefeld, Germany

�Department of Economics, University of Klagenfurt, Klagenfurt, Austria�London School of Economics, London, UK

Abstract

The theoretical background of the empirical investigations to be reported in this paper arepositionalist aggregation functions which are numerically representable. The broad Bordarule is proposed as an aggregation mechanism for the case of a complete pro"le of theso-called individual extended orderings. We modify this rule to re#ect considerations ofequity. Students from Germany, Israel, the Baltic States, Austria and Slovenia were con-fronted with questionnaires that describe &situations', most of which re#ect di!erent aspects ofneeds. All situations start from the preference structure which underlies an equity axiom. Weare focussing on the following three points: (a) What is the percentage of respondentssatisfying the equity axiom? (b) How often do the students revise their initial decision whenmore and more people join the side of the more advantaged? (c) Are there major di!erencesacross countries and cultures? � 2001 Elsevier Science B.V. All rights reserved.

JEL classixcation: D71; D63

Keywords: Distributive justice; Rawlsianism; Equity principle

1. Introduction

For about two centuries, utilitarianism of one form or another has been thedominating criterion to evaluate social welfare. In order to decide whether state

0014-2921/01/$ - see front matter � 2001 Elsevier Science B.V. All rights reserved.PII: S 0 0 1 4 - 2 9 2 1 ( 0 1 ) 0 0 1 1 9 - 2

x is at least as good for society as state y, utilitarianism prescribes that theutilities that accrue to the individual members of society under the two states beaggregated. So x will be chosen for society if the utility sum under x is at least aslarge as the utility sum under y. Utilitarianism presupposes that utility iscardinally measurable and interpersonally comparable. Let us assume for a mo-ment that these presuppositions are unproblematic. The question then iswhether it is natural to sum up utility quantities (&utils') across individuals. Weknow, of course, the answer that Bentham and other scholars would have givento our query. Let us rephrase our question: do &normal individuals' think interms of aggregate utilities that accrue to the individuals under, say, di!erentsocial policies when they make welfare judgements?In Gaertner (1994), we had designed a sequence of situations of increasing

complexity with which we confronted larger numbers of undergraduate studentsin economics and business administration at the University of OsnabruK ck. Wewanted to know whether the students made their evaluations on the basis ofcalculating sums of individual utilities. The results that we obtained did notprovide strong support for this hypothesis. On the contrary, we have extensiveevidence that large numbers of students did not judge in terms of sums of utilites.Of course, one has to be very careful when making such a statement. More datawill de"nitely be needed. The situations that we gave to the students are, withminor modi"cations, the basis for our present investigation as well.Rawls's (1971) theory of justice proposing two principles of justice which are

meant to be guidelines for how the basic structure of society is to realize thevalues of liberty and equality, has become a powerful contestant of utilitarian-ism in recent years. Rawls's second principle of justice, known as the di!erenceprinciple or maximin rule, requires to focus on the worst-o! (group of) indi-vidual(s) in society when considering alternative economic policies and pre-scribes that policy as the best one which maximizes the welfare of the worst-o!.Rawls's maxim presupposes the existence of ordinal utilities and requires thatcomparisons of levels of welfare across individuals can be made. Constituent forRawls's second principle is the so-called equity axiom. It makes a particularrequirement for a society of only two individuals or, more generally, for asociety where only two individuals are a!ected by a change from one policy toanother. We want to call the two policies x and y and we postulate that person1 prefers x to y, person 2 prefers y to x, and independently of whether x or y iseventually implemented, person 2 is always better-o! than person 1. For sucha situation, the equity principle requires x to be socially preferred to y. Variousversions of the equity axiom were formulated by Sen (1973), Hammond (1976),and others.Is there a possibility &to check' whether individuals follow the Rawlsian

di!erence principle in their judgements? Our question is twofold. First of all, wewould like to know whether people's evaluations satisfy the demands andimplications of the equity principle. Secondly, we wish to know whether those

954 W. Gaertner et al. / European Economic Review 45 (2001) 953}963

who ful"l this axiom would follow it &unconditionally', i.e. focus exclusively onthe worst-o! members of society. How can this be done? We ask the reader toallow us to do the following detour.

2. The theoretical background in a nutshell

In Gaertner (1992), a theoretical model was put forward mapping pro"les ofthe so-called individual extended orderings into orderings over a given numberof social states. These extended orderings are judgements of positions which themembers of society are holding under alternative economic measures. Themapping from pro"les of individual extended orderings into the set of orderingsover social states is called a positionalist aggregation function, and a schemewasproposed to represent such a function numerically by a so-called interpersonalrank order rule. This last rule attaches weights to individual positions, and itwas argued that the weights should be such that the rank order rule satis"esa modi"ed version of the equity axiom described in the introduction. The idea isto subject a linear weighting system (like the Borda method) to nonlinear,concave transformations in such a way that di!ering degrees of concavity repre-sent di!erent degrees of equity-orientation. This would allow to be &very close' toRawls's single focus rule (viz., his di!erence principle) or &quite far away' fromthis rule.How can the proper degree of concavity be determined? Basically, there

is an in"nite number of strictly concave transformations of the underlyinglinear weights. In Gaertner (1992) we made the following suggestion onhow to determine an individual's desired degree of concavity of the interper-sonal ranking rule or, for that matter, his or her desired degree of equity-orientation.Let us consider the following two-person pro"le of extended orderings,

denoted E�:

RI�: (y, 2) (x, 2) (x, 1) (y, 1),

RI�: (y, 2) (x, 2) (x, 1) (y, 1).

This has to be read as follows: Both individuals agree that it is best to beperson 2 under policy y, let us say. This is better than being person 2 underx which is better than being person 1 under x which, again, is better than beingperson 1 under y. The reader should verify that this two-person pro"le exactlyre#ects the structure of the equity principle.According to the strong equity axiom from the social choice literature (see

Deschamps and Gevers, 1978) and elements from the class of equity-orientedrank order rules, x will be declared as preferable to y. We now enlarge this basicpro"le by adding the extended orderings of persons 3,4,2, thereby preserving

W. Gaertner et al. / European Economic Review 45 (2001) 953}963 955

�The internet address is http://nts4.oec.uni-osnabrueck.de/mikro/darp.pdf. All in all, we hadgiven six di!erent situations to the students. All six situations are fully reproduced in Gaertner andJungeilges (2000) and can also be downloaded from http://sticerd.lse.ac.uk/publications/darp.asp.

the structure of E�. E�, for example, is

RI�: (y, 3) (x, 3) (y, 2) (x, 2) (x, 1) (y, 1),

RI�: (y, 3) (x, 3) (y, 2) (x, 2) (x, 1) (y, 1),

RI�: (y, 3) (x, 3) (y, 2) (x, 2) (x, 1) (y, 1).

We then ask all members of society how they would wish to resolve thesituations E�,E�,2 . All those individuals who accept the strong equity axiomwill, of course, say that for E� alternative x should be the preferred state. Forbrevity's sake, let us focus on just one member of the society. Will he or she "ndx also preferable in situation E�? If &yes', will the same verdict hold in E�,E�,2 ?If at some point in this successive questioning the individual wishes to switchfrom &x preferable to y' to &now y should be preferred to x socially', we wouldhave to "nd a transformation such that the interpersonal ranking rule bringsforth exactly this result. It could, of course, be that given the size of the society,the particular member we are currently focusing on would always want x to besocially preferred to y. Again, a transformation function would have to bepicked accordingly.Clearly, for di!erent members of society there will be di!ering &switching

points', if at all, so that in order to end up with one societal interpersonalranking rule, one would have to solve an aggregation problem within anaggregation procedure. Also, society's degree of equity-orientation can be ex-pected to be largely dependent on the issue at stake.

3. The situations

The three situations that we discuss in the sequel can be found on theinternet.� The structure of these cases is similar to the one in our E�,E�,2pro"les above. There is always one (group of ) person(s) who is worst-o! underboth alternatives x and y. That person is better-o! under x than under ywhereasall the other (groups of) individuals who are introduced successively are better-o! under y than under x. Let us be a bit more concrete by brie#y looking atsituation 1. Here the issue is whether to allocate a certain amount of money toprovide some help for a handicapped person (alternative x) or to teach anintelligent child (alternative y). Clearly, the intelligent child is always better-o!than the handicapped person whatever decision will be taken. Moreover,


�All in all, roughly 600 students were involved in our questionnaire}experimental approach atOsnabruK ck University.

� In OsnabruK ck, we had two versions of our questionnaire, a technical and a non-technical version(the technical version is reproduced on the internet). Of course, each student only saw one version. InIsrael and the Baltics, we used the non-technical version. In Austria and Slovenia, the students onlyreceived the technical version. The OsnabruK ck results for the two versions did not show anydi!erence, given an error probability of 5%.

the handicapped person is better-o! under x than under y, while exactly theopposite is the case for the intelligent child. Now introduce successively morechildren who would also receive education. So more and more individuals enterwho unanimously prefer y to x. Does this fact matter for the evaluativejudgement?The situations were presented to four classes of undergraduate students at the

University of OsnabruK ck during the years 1989, 1990, 1993 and 1994 as well asto students in the three Baltic states during the academic year 1997/1998, tostudents in Israel in 1999, and to students in Slovenia and Austria in 1998 and1999. All students were enrolled in economics or business administration. At thetime of investigation, the students had not yet taken a course on welfareeconomics and theories of distributive justice, such as utilitarianism, Rawlsianismand game theoretical solutions.The situations re#ected di!erent aspects of needs. The "rst case has just been

brie#y described. In the second case, a decision had to be taken either to givea certain sum of money to starving people in Subsaharan Africa or to "nanceenvironmental programs in the home country. In the third case (actually the lastcase in the sequence of six situations), we wanted the students to decide betweenan economic reconstruction program for a run-down country with some in-fringement of basic rights and a slow recovery process with all basic rightsguaranteed.For brevity's sake, it is impossible to report all the results that we have

received so far. The OsnabruK ck results proved to be very stable over the years.�We have selected results from our 1994 investigation which is closest to all theother investigations done recently. Table 1 gives the evaluations of 63 Osna-bruK ck students from 1994.� Table 2 presents the judgements of 46 students inIsrael. Table 3 reports the evaluations of 67 students from the Baltics (Estonia,Latvia, and Lithuania). Table 4 gives the evaluations of 49 students from theprovince of Carinthia in Austria, and Table 5 reports the judgements of 115students from Ljubljana in Slovenia.Explaining the digits and numbers in Tables 1}5, 0 always represents the

choice of alternative x, 1 stands for the choice of alternative y. In order to bemore explicit, 0000, for example, refers to those students who took a decision infavour of x in all cases, i.e. in the basic situation and in all of its variants. 0001,0011, and 0111 represent the verdicts of those respondents who decided at one


Table 1Investigation in OsnabruK ck in 1994. Relative frequencies for all possible decision patterns (samplesize n"63; x coded as 0, y coded as 1).

Sequence Dec. Sit. 1 Sit. 2 Sit. 3

0 0 0 0 0 0.603 0.413 0.6670 0 0 1 1 0.016 0.016 0.0480 0 1 0 2 0.000 0.000 0.0000 0 1 1 3 0.095 0.048 0.0480 1 0 0 4 0.000 0.000 0.0000 1 0 1 5 0.000 0.000 0.0000 1 1 0 6 0.000 0.000 0.0000 1 1 1 7 0.143 0.079 0.0321 0 0 0 8 0.000 0.000 0.0001 0 0 1 9 0.000 0.000 0.0001 0 1 0 10 0.000 0.016 0.0001 0 1 1 11 0.000 0.000 0.0001 1 0 0 12 0.000 0.000 0.0001 1 0 1 13 0.000 0.000 0.0001 1 1 0 14 0.000 0.079 0.0001 1 1 1 15 0.143 0.349 0.206

% of switch 25.4 14.3 12.8

% ful"lment 85.7 55.6 79.5of equity axiom

point to revise their original judgement. Sequences such as 0101 are very di$cultto interpret, but this particular one, for example, hardly occurred. In cases whereit occurred, it represented the opinion of just one probant. The numbers in thecolumns of situations 1}3 give the percentages of answers within each group ofundergraduates. Relative frequencies of a revision or &switch' are contained inthe lower part of each table. All those sequences which begin with 0 representstudents who satis"ed the equity axiom introduced above. Correspondingly, allthose sequences which start with 1 hint at a violation of the equity axiom. Thepercentages of students who satis"ed the equity axiom are given at the bottom ofeach table.

4. Results and interpretations

We now wish to discuss the results of the three situations that we haveselected for this presentation. The order in which we comment on the variousresults will be OsnabruK ck, Israel, the Baltics, Austria and Slovenia.


Table 2Investigation in Israel (Bar-Ilan and Ruppin) in 1999. Relative frequencies for all possible decisionpatterns (sample size n"46; x coded as 0, y coded as 1).


0 0 0 0 0 0.609 0.413 0.6890 0 0 1 1 0.000 0.000 0.0000 0 1 0 2 0.021 0.000 0.0000 0 1 1 3 0.174 0.196 0.2000 1 0 0 4 0.000 0.000 0.0000 1 0 1 5 0.021 0.000 0.0000 1 1 0 6 0.000 0.043 0.0000 1 1 1 7 0.109 0.065 0.0201 0 0 0 8 0.000 0.000 0.0001 0 0 1 9 0.000 0.000 0.0001 0 1 0 10 0.000 0.000 0.0001 0 1 1 11 0.000 0.000 0.0001 1 0 0 12 0.000 0.000 0.0001 1 0 1 13 0.000 0.000 0.0201 1 1 0 14 0.000 0.000 0.0001 1 1 1 15 0.065 0.283 0.067

% of switch 32.6 30.4 22.2


Situation 1: The decision to give the money to the handicapped person in allcases was very strong in OsnabruK ck (60.3%). Only 14.3% of the students wantedthe amount of money to go into the education of the intelligent child(ren) rightaway. This percentage is also indicating the relative frequency of a violation ofthe equity axiom. Those who wished to revise their original decision which, atthe beginning, was in favour of helping the handicapped person were 25.4% ofthe probants. The results for Israel are quite similar. 60.9% wanted to transferthe money unconditionally to the handicapped person. Only 6.5% wished togive the money to the child(ren) right from the beginning. Switching was a bithigher (32.6%) than in OsnabruK ck. The Baltic results are totally di!erent. Only3%were willing to give the money to the handicapped person in all cases. 23.9%wanted the money to go into the education of the child(ren) unconditionally.Switching was very high (52.2%) and the equity axiom was satis"ed by only65.7% of the students. Carinthian and Slovenian students lie &somewhere in themiddle' between German and Israeli students on the one side and Balticstudents on the other. While 34% of the Austrian students wished to give the


Table 3Investigation in the Baltics in 1997/1998. Relative frequencies for all possible decision patterns(sample size n"67; x coded as 0, y coded as 1).


0 0 0 0 0 0.030 0.119 0.1490 0 0 1 1 0.000 0.060 0.1490 0 1 0 2 0.045 0.060 0.0150 0 1 1 3 0.179 0.134 0.1340 1 0 0 4 0.000 0.000 0.0150 1 0 1 5 0.015 0.015 0.0000 1 1 0 6 0.045 0.030 0.0150 1 1 1 7 0.343 0.104 0.1491 0 0 0 8 0.015 0.000 0.0151 0 0 1 9 0.015 0.030 0.0001 0 1 0 10 0.015 0.030 0.0001 0 1 1 11 0.030 0.000 0.0151 1 0 0 12 0.015 0.045 0.0151 1 0 1 13 0.015 0.015 0.0151 1 1 0 14 0.000 0.045 0.0301 1 1 1 15 0.239 0.313 0.284

% of switch 52.2 29.8 43.2


resources to the handicapped person unconditionally (vs. 23.5% in Slovenia),only 4.3% of the Austrian students wished the money to go into education rightfrom the beginning (vs. 15.3% in Slovenia). What is quite interesting in a com-parison of the latter two samples is that the percentage points both for thesequence 0011 and 0111 are quite high and almost the same, resulting in nearlythe same percentage of a switch. This latter frequency is almost the same as thatfor the Baltics.Situation 2: We wish to be much briefer now since the "gures should have

become self-explanatory by now. Particularly in OsnabruK ck and Israel, strongopinions were articulated, either in terms of a resolute decision in favour of helpfor the starving people in Subsaharan Africa (41.3% both for OsnabruK ck andIsrael) or in favour of support for the environmental program (34.9% resp.28.3%). For the sequence 1111, the percentages are roughly the same for theBaltics, Austria and Slovenia (31.3%, 34% and 29.9%). For unconditional helpgoing to Africa, the frequencies for the latter three areas are de"nitely lower(11.9%, 23.4% and 14.9%). OsnabruK ck and Carinthian students show a verylow switch frequency.


Table 4Investigation in Austria (Carinthia) in 1999. Relative frequencies for all possible decision patterns(sample size n"49; x coded as 0, y coded as 1).


0 0 0 0 0 0.340 0.234 0.2670 0 0 1 1 0.106 0.021 0.1110 0 1 0 2 0.000 0.021 0.0000 0 1 1 3 0.213 0.106 0.1110 1 0 0 4 0.000 0.043 0.0000 1 0 1 5 0.000 0.000 0.0000 1 1 0 6 0.043 0.000 0.0000 1 1 1 7 0.213 0.021 0.1111 0 0 0 8 0.000 0.085 0.0221 0 0 1 9 0.000 0.021 0.0001 0 1 0 10 0.000 0.021 0.0001 0 1 1 11 0.021 0.021 0.0221 1 0 0 12 0.021 0.043 0.0221 1 0 1 13 0.000 0.000 0.0001 1 1 0 14 0.000 0.021 0.0441 1 1 1 15 0.043 0.340 0.289

% of switch 53.2 14.9 33.3


Situation 3: This case is about the restoration of basic human rights vs. quickeconomic recovery. Our hunch is that for the Baltic and Slovenian students ourmade-up story contained some real-life elements. Unconditional support forhuman rights was very strong (and almost identical) in OsnabruK ck and Israel(66.7% and 68.9%), but was considerably lower in Carinthia (26.7%), somewhathigher in Slovenia and appallingly low in the Baltics (14.9%). This correspondsinversely to the high relative frequency for the unconditional growth option inthe Baltics, Carinthia and Slovenia (28.4%, 28.9% and 32.3%). Also the ful"l-ment of the equity axiom is much lower in the latter three areas (62.6%, 60%and 64.6%) than in OsnabruK ck and Israel (79.5% and 91.1%). This last picturegets additional support from the fact that switches occurred much more often inthe "rst three areas than in the last two.There are a couple of striking points that we think are worth mentioning.

First of all, the data from OsnabruK ck and Israel are surprisingly similar. Onecould say that the Israeli students are even a bit more equity-oriented (in thesense of caring for the worse-o!). The results from the Baltics are in sharpcontrast to this. Obviously, the situation of handicapped people is of no great


Table 5Investigation in Slovenia in 1998}1999. Relative frequencies for all possible decision patterns(sample size n"115; x coded as 0, y coded as 1).


0 0 0 0 0 0.235 0.149 0.3330 0 0 1 1 0.051 0.046 0.0300 0 1 0 2 0.000 0.011 0.0000 0 1 1 3 0.255 0.138 0.1510 1 0 0 4 0.000 0.000 0.0000 1 0 1 5 0.000 0.011 0.0000 1 1 0 6 0.000 0.011 0.0000 1 1 1 7 0.245 0.149 0.1311 0 0 0 8 0.010 0.023 0.0101 0 0 1 9 0.000 0.011 0.0101 0 1 0 10 0.000 0.000 0.0001 0 1 1 11 0.041 0.034 0.0001 1 0 0 12 0.010 0.023 0.0101 1 0 1 13 0.000 0.000 0.0001 1 1 0 14 0.000 0.092 0.0001 1 1 1 15 0.153 0.299 0.323

% of switch 55.1 33.3 31.3


concern in these countries at the moment, and the issue of guaranteeing basichuman rights does not seem to be very high on the agenda either currently. Also,the percentage of Baltic probants who are primarily concerned with economicgrowth is close to the percentage of those who would support the education ofgifted children unconditionally. This obviously manifests a certainWeltanschauung.At one point above, we said that Austria and Slovenia are &somewhere in the

middle'. This is surprising in so far as one would perhaps have expected Austrianstudents to be close to the German students. The data informs us that this is byno means the case, particularly with respect to situations 1 and 3. In contrast,the answers of Austrian students are more similar to those from Slovenia than tothose from Germany. However, in situation 3, the frequencies for sequences0000 and 1111 are both higher in Slovenia than in Carinthia which indicatesthat on this particular issue there is more polarization of public opinion in theformer socialist country than in Austria, and the reasons for this seem to beobvious in the light of recent history. In situation 1, the ful"lment of the equityprinciple is considerably higher in Austria than in Slovenia.


5. Concluding remarks

In this paper, we were focusing on Rawls's theory of justice, his maximinprinciple in particular. Our interest was twofold. First of all, we wanted to knowto what extent students base their evaluations on the maximin principle and theequity axiom underlying it. We have good reasons to assume that only very fewof our probants, if at all, knew the Rawlsian justice principles or had heard of theequity axiom at the time of their evaluation. So in contrast to other investiga-tions, the issue here was not to have the students take a clear stand either for oragainst the equity principle. Secondly, we wished to know to what extentindividuals are prepared to follow Rawls in his unconditional focus on theworst-o! in society. We have seen that the answer to both queries is bothcontext-dependent and dependent on the political and cultural environment.From verbal explanations given in the questionnaires, it becomes also obviousthat people do not put themselves under a &veil of ignorance' but consciouslytake into account their personal interests when making judgements. It seems tous that the insights that we get from investigations such as ours are of greatimportance in an era when, within continental Europe at least, political bound-aries begin to shrink. Of course, further studies are badly needed in order tobroaden the data base which will, eventually, provide a more solid basis for ourinferences.

Acknowledgements

W. Gaertner is grateful to Volkswagen-Foundation for generous "nancialsupport and R. Neck is grateful to JubilaK umsfonds der OG sterreichischenNationalbank (Project No. 6917).

References

Deschamps, R., Gevers, L., 1978. Leximin and utilitarian rules: A joint characterization. Journal ofEconomic Theory 17, 143}163.

Gaertner, W., 1992. Distributive judgments. In: Gaertner, W., Klemisch-Ahlert, M. (Eds.), SocialChoice and Bargaining Perspectives on Distributive Justice. Springer, Heidelberg (Chapter 2).

Gaertner, W., 1994. Distributive justice: Theoretical foundations and empirical "ndings. EuropeanEconomic Review 38, 711}720.

Gaertner, W., Jungeilges, J., 2000. Evaluation via Extended Orderings: Empirical Findings fromWestern and Eastern Europe, Discussion Paper No. 42, London School of Economics,STICERD. Forthcoming in Social Choice and Welfare.

Hammond, P.J., 1976. Equity, Arrow's conditions, and Rawls's di!erence principle. Econometrica44, 793}804.

Rawls, J., 1971. A Theory of Justice. Harvard University Press, Cambridge, MA.Sen, A.K., 1973. On Economic Inequality. Clarendon Press, Oxford.


cross-cultural equity evaluations: a questionnaire-experimental approach

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