“Last-Place Aversion”: Evidence and Redistributive Implications

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Citation: Ilyana Kuziemko, Ryan Buell, Taly Reich, Michael I. Norton (2013/11/13) “Last-Place Aversion”: Evidence and Redistributive Implications. The Quarterly Journal of Economics (RSS)
DOI (original publisher): 10.1093/qje/qjt035
Semantic Scholar (metadata): 10.1093/qje/qjt035
Sci-Hub (fulltext): 10.1093/qje/qjt035
Internet Archive Scholar (search for fulltext): “Last-Place Aversion”: Evidence and Redistributive Implications
Download: http://www.hbs.edu/faculty/Publication%20Files/The%20Quarterly%20Journal%20of%20Economics-2014-Kuziemko-105-49(2) 20215a4d-e73b-48e9-8de7-f6862054e552.pdf
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Summary

Authors "hypothesize that individuals exhibit a particular aversion to being in last place, such that a potential drop in rank creates the greatest disutility for those already near the bottom of the distribution" and explore how LPA "predicts individuals’ redistributive preferences outside the laboratory."

Find using games, survey data, and General Social Survey:

  • LPA exists
  • Those with wage slightly above minimum wage less likely to support increase in minimum wage
  • Those with incomes above poverty level but below median less likely to support redistribution

Better understanding of how individuals cope with low rank could inform interventions intended to help them.

Theoretical and Practical Relevance

Unmentioned but maybe relevant further research on implications of LPA:

  • whether redistribution which compresses but may not change ordering (eg everyone gets same amount or discount through goods available to all, basic income, monopoly busting) suffers from the same lack of support from those near last place
  • lower class support for oppression of outgroups
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